Parliament gives green light to help municipalities balance their books

PLANS to give debt-ridden councils an extra two years to get their finances in order were given the green light by Parliament on Monday.

MPs unanimously approved an amendment to the Municipalities Act which will defer outstanding social security, tax and Provident Fund payments to January 2020 to give them time to come up with a debt restructuring plan.

It must now be approved by President Mustafa Akıncı before becoming law.

Around 338 million TL is owed to the state by 19 of the country’s 28 municipalities. Seventeen have been named as owing social security and Provident Fund premiums and tax, while two more, as yet unidentified, are solely in tax arrears.

Interior Minister Ayşegül Baybars Kadri told Parliament during a debate on the amendment that the changes were a top priority for the government, and the amount of money spent by the councils in question was “higher than their income”.

Mrs Baybars Kadri, a minister from the People’s Party (HP), said the government would take “whatever steps were necessary” to deal with the problems at Yenierenköy Municipality, whose mayor and councillors last month resigned after workers had gone months without being paid.

Social Democratic Party (TDP) Labour and Social Security Minister Zeki Çeler said MPs “should not forget the bitter experiences of the past” when trying to resolve the problems in local government.

HP’s Hasan Topal called for a reduction in the number of local authorities to make savings, saying that “nothing could be achieved with so many municipalities”. He said councils needed to find ways of boosting their revenues, especially those covering the Mesaoria plain.

Ersin Tatar, of the main opposition National Unity Party (UBP), said the municipalities were experiencing “major problems” and that state financial assistance had almost been doubled to help them cover their costs.

He said the legal amendment “was not a reform” but simply “postponed the problems”, while party colleague Nazım Çavuşoğlu said the debts had accrued because of the “wrong steps taken so far” and “administrative weaknesses” within the municipalities.

He said two years’ grace would “not solve the problems” and that it would “not be possible to take the country forward without local government reform”.

Another UBP MP, exminister Ersan Saner, claimed interest alone over the next two years would add another 58 million TL to the total social security and Provident Fund debts.

Rebirth Party (YDP) leader Erhan Arıklı said the municipalities were facing “bankruptcy”. Mayors were getting the blame for the “mistakes of past governments” and Parliament and political parties were “equally responsible” for the woes.

Municipality Workers’ Trade Union (BES) chairman Mustafa Yalınkaya said the amendment passed by Parliament amounted to “only two to three articles” of a larger draft Municipalities Bill, which he said was some 300 pages long.

He called the government’s action “too little, too late” and warned that other local authorities could also fall into financial difficulties.

“Social security is owed

101.5 million TL. The Provident Fund is owed 112.1 million TL. Municipalities owe a total of about 125 million TL in tax,” he said.

“There is a need to reduce the number of municipalities, otherwise many more will face the same fate as Yenierenköy.”