Select committee concerned about Treasury decision to withhold equitable share
The Select Committee on Appropriations has expressed its concern about the decision of National Treasury to withhold equitable share from municipalities.
The National Treasury took the decision because of the debt municipalities owe to Eskom and the National Water Board. Briefing the Committee on the withholding of local government equitable share allocations to certain municipalities, the Financial Fiscal Commission (FFC) said the decision made by the National Treasury would affect about 59 municipalities and impact 1 361 416 households.
The Chairperson for the Committee, Mr Seiso Mohai, said the Committee had previously been briefed by the National Treasury on the issue during which a long discussion on the issue had taken place. During the discussion, the Committee had expressed its concern about the consultation process as it relates to the process, particularly to parliamentary process. “We have to deal with the implications of the decisions of this nature,” Mr Mohai said.
He said during that previous engagement, the Committee was informed that the decision of withholding equitable share was primarily to encourage municipalities to pay and to honour their commitments to the debt.
The Committee is of the view that collaboration with various Committees of Parliament needs to take place to resolve the challenges municipalities face and to deal with any discrepancies in billing systems that municipalities may experience.
The Committee came to an agreement that a roundtable discussion should take place with various Ministers meeting at a political level to find solutions. Members of the Committee said withholding funds will not resolve the matter and would affect the poor in affected communities. Withholding of local equitable share will result in the closure of municipalities, which will have a huge impact on service delivery.
In his closing remarks Mr Mohai said,
- “We indicated in the 2015 Division of Revenue Report when it was tabled in the National Council of Provinces that National Treasury will brief Parliament within 30 days after adoption of the report about the situation with regard to municipalities whose equitable share has been withheld.”
- “Regarding the gravity of the matter the Committee was of the view that the matter requires extensive consultation amongst stakeholders involved and the space for further interaction should be created.”
- “Now we have heard a presentation with recommendations from the FFC, the Committee will deliberate on the recommendations and strengthen them, while one of the issues that the Committee wishes to consider is that the political leadership at various levels should be engaged with regard to debt situations in municipalities.”
Media enquiries or interviews with the Chairperson, please contact:
Ms Yoliswa Landu
Parliamentary Communication Services
Tel: 021 403 8203
Cell: 081 497 4694
E-mail: ylandu@parliament.gov.za
