Samwu backs Salga’s bigger budget bid
THE country’s biggest union in the local government sector has backed the demands for municipalities to be given an increased share of the national Budget allocation.
The SA Municipal Workers’ Union (Samwu) is backing calls by the SA Local Government Association (Salga) for a significant increase in the allocation of R415.5 billion to municipalities over the next three years.
Salga has complained that, despite being at the coalface of service delivery, it receives an inadequate share of nationally raised revenue.
The association has now commissioned research which it hopes will provide a detailed set of recommendations for a comprehensive review of the local government funding model.
The study is expected to be concluded in March next year.
Over the medium term, the government is proposing to allocate 48.1% of available non-interest expenditure to national departments, 42.9% to provinces and 9% to local governments.
Samwu general secretary Simon Mathe told The Star yesterday that it had been making a call to the National Treasury to increase local government’s share.
Mathe said municipalities were often unable to fully implement their integrated development plans due to inadequate financial resources.
“But we need specialist and effectively skilled people with integrity,” he added, warning that cadre deployment in administrations was one of the reasons that municipalities were struggling with financial management.
According to Salga, it had identified a number of factors that showed that the local government equitable share determination should be revisited.
Among these were claims that the “true equitable share” after adjusting local government revenue was 28%.
But Salga insists that, in contrast, 2016/17 medium-term expenditure framework figures show that the figure, after it’s adjusted for local revenue, is somewhere between 19.5% and 22%, depending on the measure of revenue that is used.
“For many municipalities, the revenue-raising assumptions contained in the White Paper – and which form the foundation of the current local government funding model, including the determination of the equitable share – are neither accurate nor attainable, given local demographics and realities,” Salga warned in a presentation to Parliament.
The association added that the role of the bulk suppliers in undermining municipal revenue collection needed to be considered and addressed.
Bulk suppliers to municipalities included Eskom for electricity and water boards across the country.
“A more realistic model of municipal revenue needs to be developed, and the structural impediments that prevent municipalities from collecting revenue need to be addressed,” Salga said.
Administrative costs in municipalities were rising considerably, including the extensive use of consultants to perform administrative tasks such as the compilation of annual financial statements, and this was greatly reducing the amount of funding available for direct spending on service delivery, infrastructure investment and management.