Outa advises municipalities to pay debts

THE ORGANISATION Undoing Tax Abuse (Outa) has appealed to the country’s municipalities – especially those owing Eskom and the water boards not to spend the equitable share grants they received from National Treasury on payments of salaries and bonuses.

Outa made the call as National Treasury this week was scheduled to transfer another tranche of the equitable share grant of R23 billion to the municipalities that furnished it with proper financial statements.

In October Treasury, through Malijeng Ngqaleni – its deputy director-general of Inter-governmental Relations – warned that municipalities that proceeded to adopt unfunded budgets would have their equitable share grant withheld.

One of those municipalities is Emfuleni Local Municipality in Gauteng.

The equitable share is the main funding from national government to local governments and totals R69bn this year. It is paid in three tranches throughout the year, and the December payment is R23bn.

The equitable share is also intended to enable the municipalities to provide basic services, particularly for the indigent communities.

Now, Michael Holenstein – Outa inland regional manager for local government – has asked municipalities to urgently spend their equitable share grant on payments towards their municipal debts to Eskom and the water boards.

This week, Parliament’s Standing Committee on Public Accounts heard that the municipal debt owed to Eskom escalated from R1.2bn in 2013 to over R26bn by the end of September this year.