Salga cries foul over al­lo­cated fund­ing

Users can’t af­ford to pay for ser­vices

Sowetan - - News - By Pen­well Dlamini

The Trea­sury’s bud­get al­lo­ca­tions to lo­cal gov­ern­ment are not enough to en­able mu­nic­i­pal­i­ties to ful­fil their con­sti­tu­tional obli­ga­tions.

Ac­tu­ally, in the cur­rent eco­nomic con­di­tions, it is highly un­likely mu­nic­i­pal­i­ties can pro­vide ba­sic ser­vices.

This is the view of the SA Lo­cal Gov­ern­ment As­so­ci­a­tion (Salga) fol­low­ing the tabling of the medium-term bud­get pol­icy state­ment by the Trea­sury last week.

In the bud­get, the con­tri­bu­tion to lo­cal gov­ern­ment in eq­ui­table share and con­di­tional grants is pro­jected to grow from 9.1% (of to­tal bud­get) in the 2018/19 fi­nan­cial year to 9.3% (of to­tal bud­get) in the 2020/21 fi­nan­cial year.

Eq­ui­table share will rise from R62.7-bil­lion to R75.7-bil­lion in the same pe­riod while con­di­tional grants will surge from R46.4-bil­lion to R53.3bil­lion. Sim­phiwe Dzengwa, the ex­ec­u­tive direc­tor of mu­nic­i­pal fi­nances at Salga, said the small bud­get had a neg­a­tive im­pact on the de­liv­ery of ba­sic ser­vices.

“Lo­cal gov­ern­ment is the most un­der­funded sphere de­spite the chal­lenges and the re­spon­si­bil­i­ties that it caries,” said Dzengwa. “There is no real growth in the eq­ui­table share. What you see is just an in­fla­tion ad­just­ment.

“This is fur­ther com­pli­cated by the fact that the lev­els of un­em­ploy­ment in the coun­try are very high.

“With the econ­omy not grow­ing, many peo­ple can­not af­ford to pay for mu­nic­i­pal ser­vices, yet they de­mand more from mu­nic­i­pal­i­ties,” he said. “The lat­est fig­ures show R128-bil­lion debt which is money owed by busi­nesses, house­holds and all who use mu­nic­i­pal ser­vices.

The bulk of this debt is [com­ing] from house­holds who can­not af­ford to pay.”

He added that there needs to be a re­view of the fund­ing al­lo­cated to lo­cal gov­ern­ment from the fis­cus.

“Be­cause South Africa as a sov­er­eign [state] was down­graded, it meant that 10 of the met­ros that are rated were af­fected by that.”


Fi­nance Min­is­ter Malusi Gi­gaba pre­sented the bud­get in par­lia­ment last week.

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