KwaZulu-Natal Legislature  

PIETERMARITZBURG: 21 July 2009

Madam Speaker

In her budget speech, the Hon. MEC for Finance pledged that her government would cut the sort of expenditure that led to overspending in the past.
 

The MEC promised to cut down on luxuries, such as excessive catering and advertising. Key to this end is a 7.5 percent budget reduction across all government departments over the next three years. Cutting the budget at a time of economic recession and in the face of vast overspending was a sensible decision. No one can dispute that.

But unlike most other departments, Local Government and Traditional Affairs has not effected this cut against Goods and Services, but rather against Compensation of Employees. As a result, we will see none of this cut in catering, advertising and self-promotion in the Department of Local Government. One wonders to what extent this logic has been motivated by the local government elections set to take place in 2011. Is this not a golden opportunity for the ANC to campaign in these elections using taxpayers’ money?

In yesterday’s press, the MEC for Finance articulated why this government cannot do without communication with the public. If the ANC is keen to tell us what their government is up to, why not end secrecy and table in this House the outstanding forensic audit report into mismanagement in the Department of Agriculture?

Madam Speaker, the budget reduction against Compensation of Employees in the Department of Local Government will have a negative impact on recruitment, retention and training of staff. Cutting this segment of the budget is a bad decision given the lack of capacity in local government.
 

The lack of capacity is an endemic challenge in our municipalities while the department, which is supposed to give municipalities support, has itself a history of under-spending in this regard.

Salaries paid to municipal employees often do not reflect their individual value and contribution. As a result, the ability of local government to deliver services is compromised. The Department of Local Government is not providing leadership by example to municipalities.

Madam Speaker, once again public dissatisfaction with municipal services is brewing. Early in July, protests started in Mpumalanga. Last week, citizens moved to protest against the work of the entire council in Mooi River and against an individual councillor in Pietermaritzburg. More than 5000 residents of Durban are still waiting to have their appeals against inflated property valuations heard before an appeals board that should have been established by the 1st of July - but wasn’t.

The cause for protest is understandable. Badly performing municipalities are hiking their rates. The Eskom increase, which municipalities are applying at the moment, is hurting – in the middle of a recession and when research shows that people cannot spend more than one tenth of their income on municipal services.

On average almost 40 percent of residents of a municipality cannot afford to pay rates and rely on free basic services which municipalities cannot fully fund from their equitable share.

Poor debt collection makes things worse. Even some state institutions fail to pay their utility accounts. After a lot of debt has been written off, the total debt owed to municipalities last year still exceeded R40-billion! The unresolved problems with property valuations and excessive salary packages, like those in Howick, are adding insult to injury. The perception of misplaced priorities and councillors not managing ratepayers’ money properly is justified.

The Local Government Expenditure Review compiled by Treasury implies that municipalities depend for their survival on grants. Even some large and urban municipalities are experiencing cash flow problems. The financial viability of the entire local government sphere is at stake. Again, municipalities need leadership and support and we look to the Department of Local Government to provide it.

If we are looking to save money in local government, we should – and this is an example - streamline some of the existing processes, particularly those that have to do with procurement. The Department of Local Government is well placed to motivate for such a move. I must stress that the IFP supports the existing legal framework, including the MFMA and related procurement regulations. But we contend that in their application, some of the procurement processes frustrate rather than aid service delivery in municipalities.

It so often happens that by the time the procurement process is concluded, the prices of goods and services have increased so much that the contractors can no longer comply. This has serious implications for service delivery as the procurement process has to start all over again.

This is when those on the receiving end of municipal services become angry and councillors who represent them are singled out for punishment. Rarely is this frustration directed against civil servants who may have caused the delay or Members of Parliament who are responsible for the legislation.

Madam Speaker, another opportunity for the Department of Local Government to provide leadership and prove that this government is committed to co-operative governance is intervention in municipalities. The past experience shows that this is a highly controversial issue.

Last week, the Hon. Premier - along with the MECs for Local Government and Finance - met with the representatives of uMngeni Municipality who had petitioned the MEC for Local Government to intervene in their council. It is to this government’s credit that it met with the local people to hear them out.

But the worrying part is the Local Government MEC’s insistence on an internal investigation into irregularities regarding the salary packages for the senior management and property valuations in Howick. It is doubtful whether such serious allegations can be investigated internally when they have resulted from internal actions.

How different is this case from the ministerial intervention in Vryheid in 2005 which was prompted by a similar petition from the public. The MEC for Local Government of the day did not hesitate to bring that municipality under direct control of his department, placing it in charge of the official who, incidentally, is now being questioned about bypassing the Msunduzi council and paying for an ANC election rally with municipal funds.

Last week in Howick the MEC for Local Government said: “If we are dealing with criminals, we do not see party political colours.” My question is: Will the MEC be willing to look past politics and take action in Utrecht against ANC councillors who continue to paralyse the work of the council with a negative impact on service delivery?

Another opportunity for intervention is the overdue property appeals board for the eThekwini Metro. Why not put in place a timeframe for its establishment and freeze the disconnection of services until the residents’ appeals are heard.

These, Madam Speaker, are the challenges that no amount of government advertising – whether or not it is ordered in bulk – but only leadership can solve.

I thank you.

Contact: Roman Liptak, 078 302 0929