Chairperson,
Let me start by welcoming Minister Zweli Mkhize to the portfolio. His predecessor, who for 3 days was South Africa’s most qualified Finance Minister ever, left clown-sized shoes to fill. The mess left in Cooperative Governance and Traditional Affairs (COGTA) is for you to clean up, and it’s going to be a massive task.
Your first job, Minister, will be to address the finances of municipalities. The Minister of Finance, in reply to a parliamentary question from me, admitted that 112 out of 257 municipalities had adopted budgets for the 2017/18 financial year where their expenditure exceeds their revenue. There are many reasons for this:
- It might be that they are not collecting all the revenue that they bill;
- It might be that they are not prioritising properly, and therefore spending money on unnecessary activities; or
- It might reflect poor financial management, or corruption, or improper budgeting.
And what has this department and National Treasury done to resolve this? Not much. Just
14 of those 112 municipalities have financial recovery plans. As the Democratic Alliance, we would deploy competent financial practitioners to all municipalities now, to ensure that the budgets for the 2018/19 financial year are realistic, financially balanced and sustainable.
While we are talking about municipal finances, Minister, one of the major problems faced by municipalities is the debt crisis to ESKOM and water boards. Minister, this crisis has been around since before 2014, and there is no movement on the matter. The Inter-Ministerial Task Team has not managed to resolve it, and there is no way that many of the affected municipalities will ever be in a position to repay what they owe.
Chairperson, it cannot be denied that the spatial planning of South Africa’s municipalities exacerbated the inequalities of our apartheid history. And yet this budget has cut the funding for Urban Development Planning by 45%. This is bizarre, given the focus on the Integrated Urban Development Framework, and the dire need to redress and transform our spatial planning. The DA believes that this is an area where technical support is critical. Many municipalities lack the capacity to do this for themselves, and so we need to relook the budget and mandate of an entity such as the Municipal Infrastructure Support Agent, which seeks to provide technical support to municipalities, to include the spatial planning support so vitally needed to reintegrate our society.
Minister, in 2015 and 2016, when the amalgamation of certain municipalities was first mooted, the DA warned of the implications. We weren’t alone – the Financial and FiscalCommission advised the Municipal Demarcation Board, the former Minister, and the department, that this was ill-advised because it would result in functional municipalities being dragged down by their merger with dysfunctional municipalities. Last year I advised that the termination of the Municipal Demarcation Transition Grant would adversely affect the performance of these municipalities. This has been born out, and as a result they are not going to be able to complete their mergers in the short term.
Perhaps the saddest line item in this budget is Sub-programme 5 of Programme 3, AntiCorruption and Good Governance. With municipalities in the state they are in, the fact that this programme is allocated a miserly R5.5 million – a mere 0.1% of the departmental budget – is indicative of how seriously (or rather how carelessly) the ANC takes this issue.
Minister, corruption and maladministration is destroying our local government. It should come as no surprise that, despite a warning from National Treasury, 15 or more municipalities placed deposits illegally with VBS Mutual Bank, worth in excess of R1.5 billion, deposits they now stand to lose in their entirety. It should not be a surprise that these are some of the worst performing and most financially distressed municipalities in the country. It should be no surprise that they are all ANC-run municipalities. And it should not be a surprise that NO action has been taken by your department to intervene and rectify this situation.
Which brings me to my next point: again, noting the state of municipalities in South Africa, your department has seen fit to reduce the budget for Municipal Performance Monitoring by 82%! You have budgeted a total of R3.5 million for Local Government Support and Interventions. COGTA has been sitting on the Intergovernmental Monitoring Support and Interventions Bill for over 5 years without bringing it to Parliament. Do you ever actually do anything to fix the problems? Or do you put a band aid on them, and hope they will get better by themselves? The DA would support much more assertive intervention actions to sustain and assist these distressed local governments. We would ensure proper support structures, to help with planning, budgeting and implementation. Simply put, we would make sure that municipalities are able to do their jobs!
Minister, the Auditor-general has repeatedly bemoaned the lack of consequences for misconduct and maladministration. Your department is aware of hundreds of forensic investigations (over and above those COGTA already have in hand) which lie unattended. I will touch on just two: Thaba Chweu Local Municipality has blocked all access to a forensic report in which councillors and officials are implicated, and Buffalo City Metro has gone so far as to declare an investigation into Sport Sponsorships “Top Secret”. I am unaware of any legislation that permits this classification of a public document by a municipality, where such information has no impact on the national interest.
And the recent VBS scandal highlights the fact that councillors, municipal managers and other municipal officials blatantly and illegally flouted the law – and yet there have been no consequences for these actions whatsoever! In the DA, we believe in accountability. We believe that our public representatives and officials must be held to the highest standards – and the taint of illegal or unethical behaviour must have consequences.
The R603 million reduction in the Municipal Infrastructure Grant will see an even slower roll-out of municipal infrastructure upgrades. It will see fewer basic services delivered to the marginalized and the poor. It will see already failing sewerage plants, waterworks, roads and electricity reticulation fall into further disrepair. Minister, this is nothing less than short changing the people of South Africa. When one considers that R2.7 billion is budgeted for VIP protection and blue light brigades in the forthcoming financial year, it is clear that the ANC places its own sense of self-importance ahead of the needs of the poor.
Chairperson, it’s a fact that local government in South Africa is in a shambles and this department is failing in its mandate to fix it in order deliver much-needed clean, effective, governance. We need to hold public representatives and officials to account, and if necessary, send them to jail for misuse of the public purse. And frankly, the only party that can do this is the Democratic Alliance.