Treasury cannot collapse service delivery, warns Mkhize

Portfolio Committee on Co-operative Governance and Traditional Affairs (Cogta) chairperson Dr Zweli Mkhize has warned the National Treasury that Parliament will not hesitate to intervene if the withholding of funds from municipalities results in the collapse of service delivery.

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Earlier this month, Treasury announced it was withholding R13,5 billion in equitable share transfers to 69 municipalities over fiscal indiscipline.

Speaking during a joint sitting of the Portfolio Committee on Co-operative Governance and Traditional Affairs, the Standing Committee on Finance, the Appropriations Committee and the Standing Committee on Public Accounts (Scopa), Mkhize said Parliament’s foremost responsibility was to protect communities from the consequences of failing municipalities.

The strong message from the committees is that we will act without reservation where the executive fails to act in accordance with the law to protect service delivery and takes steps that put the public in jeopardy.

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The joint committees received briefings from the National Treasury, Cogta, the Financial and Fiscal Commission (FFC) and the South African Local Government Association (Salga) on Treasury’s decision to withhold equitable share allocations from selected municipalities because of financial management failures.

While MPs accepted that municipalities should be held accountable for persistent financial misconduct and non-compliance, they cautioned that punitive measures should not come at the expense of residents, particularly indigent households that rely on municipalities for basic services.

Standing Committee on Finance chairperson Mkhacani Maswanganyi said withholding transfers could encourage compliance but was not a solution to the deep-rooted governance crisis affecting municipalities.

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The stopping of transfers may create pressure for compliance, but it is not, in itself, a municipal recovery strategy.

Maswanganyi said national and provincial governments remained constitutionally obliged under Section 154 of the Constitution to support municipalities rather than simply impose sanctions.

Scopa chairperson Songezo Zibi called for stronger accountability across all spheres of government and demanded a list of national and provincial departments and public entities that owed municipalities money.

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The committees heard that by the end of March, the 69 affected municipalities were owed R217,8 billion by households, businesses and organs of state, with government departments accounting for R11,6 billion of that amount.

Appropriations Committee chairperson Mmusi Maimane said fiscal interventions alone would not resolve municipal failures.

We need more capable local government administrations. We must confront governance failures in local government.

While the committees reaffirmed Treasury’s constitutional authority to intervene in municipalities, they insisted that such interventions must be lawful, transparent and must not undermine service delivery.

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The committees gave the National Treasury, Cogta and the FFC seven days to submit a report to Parliament outlining a way forward.