Veterans Bill may cost up to R65 billion

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Alexander Forbes, the pension and employee benefits consultancy, says the Military Veterans Bill now before the National Assembly, could cost up to R65.2 billion over the lifetime of an estimated 56 000 veterans. This could be in excess of another 50 years as the figures show some 50% of the presumed cohort was 23 or younger in 1994.

A more conservative estimate puts the bill for the Bill at R19.623 billion, roughly the cost of the SAAB Gripen fighter programme. The defence budget, by contrast is some R34.6 billion. Some of the funds required are also already in the state budget, although under other departments, for example the R12 billion War Veterans grant allocated in the coming year in he Department of Social Development’s budget “for the men and women who fought in World War II and the Korean War”.

The Military Veterans Bill [B1-2011] aims to extend numerous benefits to veterans following a report last year by a ministerial task team set up to develop policy recommendations for veterans.

The National Assembly’s Portfolio Committee on Defence and Military Veterans early last month asked Director General of Military Veterans Tsepe Motumi to price the Bill. The draft law was formally introduced into Parliament in January. A memorandum attached to the Bill explains the new law was necessitated “by the fact that provisions of the current Military Veterans’ Affairs Act (Act 17 of 1999) are either obsolete or require reformulation in order to provide for new challenges.”

Alexander Forbes expected some 3000 of the veterans (5.4% of the cohort) to be in need of pensions and some 50% of their spouses. All 56 064 will require healthcare, pencilled in at R6000 per year and also providing for a spouse and two children aged 15 or below. Some 26.8% of veterans, some 15 000 will also qualify for a R5000 a year transport subsidy while some 20 000 (35.7%) could receive a R120 000 once-off housing subsidy.

Some 67 273 veterans, some already deceased, are also in need of “honouring and memorialisation”. For this some R25 000 will be allocated on the death of the veteran, in some cases retrospectively. Some 5000 veterans could also be eligible for an once-off employment subsidy of R4000 and the same number for a once-off “business opportunity” payment of R4000. Some 5000 would also be eligible for a R10 000 education stipend. According to Alexander Forbes, this would be payable over three years and be available to the veteran, his/her spouse and up to two children.

Business Day yesterday reported these figures are contained in a document that will tomorrow be tabled before the portfolio committee. It has already been circulated to its members. The paper said the Bill ran into trouble at the outset when it landed in Parliament before its financial implications to the state had been costed. Both the rules of Parliament and the Public Finance Management Act state that proposed legislation must be accompanied by its financial implications for the state.

Opposition Members of Parliament expressed doubts that the state could afford the extensive list of benefits that the Bill proposes for veterans. “ANC MPs, however, are clearly under pressure to get the measures on to the statute book regardless of the cost,” Business Day opined. “They said last month that military veterans were in dire straits and that the costing of the bill should not be allowed to delay its progress. Clearly this increasingly fractious constituency within the ANC will play a key role in the election of the next ANC leader next year.”

The business daily adds one of the problems facing the Department of Military Veterans is that there has already been a surge in people claiming to be veterans of the struggle against apartheid. “There have also been cases of people defrauding veterans by claiming that they could get access to the benefits for a handling fee of R80.” Motumi said the department had to interview applicants and verify their credentials in order for them to be granted benefits.



Democratic Alliance defence shadow minister David Maynier told the paper he “can now understand the reluctance, on the part of the military veterans department, to cost the Military Veterans Bill. The numbers are terrifying. The ministerial task team appears to have been a policy rigour-free zone, producing little more than a wish list of benefits for military veterans. The Department of Military Veterans is going to have to go back to the drawing board and rethink the Military Veterans Bill.
“The Deputy Minister of Defence and Military Veterans, Thabang Makwetla, must take full responsibility for bungling the Bill. The deputy minister headed up a task team that cost the taxpayer R855 000, which produced a final report that amounted to little more than a wish list of benefits for military veterans. The fact is that the benefits for military veterans, contemplated in the draft legislation, are simply not affordable,” Maynier says. “The Department of Military Veterans are going to have to go back to the drawing board and develop an affordable policy option for military veterans in South Africa”.