Salga cries foul over allocated funding
Users can’t afford to pay for services
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.