Newsletter 62 – More money, less spending – 12 March 2010
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The war of words between ratepayers’ associations and the minister of co-operative governance and traditional affairs has once again placed local government inadequacies at the fore. The ratepayers’ associations claim municipalities do not use the money paid to them by ratepayers to provide essential services. Data released by the National Treasury shows that most municipalities do not spend money which they have in their operating budgets.
The minister of co-operative governance and traditional affairs, Mr Sicelo Shiceka, last week accused some 200 white ratepayers’ associations of creating a parallel government and undermining municipalities’ ability to deliver services. The National Taxpayers’ Union in the North West responded by saying that these parallel structures were necessary because of the large number of dysfunctional municipalities around the country. Ratepayers’ associations collect money from despondent ratepayers within a particular community, then place the money into a trust. The money is then used to repair and maintain infrastructure used for services such as sewerage and garbage collection.
A report published by the treasury supports the claim that many municipalities do not use the money received from ratepayers for services. The latest actual figures published in the report were for the 2006/07 financial year.
This 2008 Local Government Budgets and Expenditure Review published by the treasury shows that 43 of the country’s 52 district and municipalities, or 83%, under-spend on their operating budgets. Some spent less than 50% of their operating budgets in the 2006/07 financial year. The operating budget deals with day-to-day costs and income. The income is received from revenue such as property rates and service charges. The money is then supposed to be used for services such as garbage collection, water, sewerage, and repairs and maintenance of infrastructure.
The report shows that Capricorn District Municipality in Limpopo spent the smallest proportion of all district municipalities of its operating budget - 41%. The Dr Kenneth Kaunda (Southern) District Municipality in the North West spent slightly more than 41% of its operating budget.
The district municipalities that overspent rather than under-spent were Alfred Nzo, O R Tambo, and Ukhahlamba in the Eastern Cape. The Motheo and Xhariep district municipalities in the Free State also overspent, as well as the Bojanala Platinum district in the North West and the Central Karoo district in the Western Cape.
Overall, municipalities had a combined operating surplus of almost R10 billion in the 2006/07 financial year. They spent R96 billion out of R106 billion available for them to provide services.
The actions taken by the ratepayers’ associations are a form of protest against poor service delivery. Just as poor communities run to the streets in protest, ratepayers’ associations are also reacting to the poor level of service delivery in many municipalities – through more formalised means. Both types of protest should serve as a wake-up call to local government to sort out the inadequacies and inefficiencies apparent in many municipalities.
- Nthamaga Kgafela
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nkgafela
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last modified
2010-03-11 09:43
