COSATU Presented its submission on the Division of Revenue Bill to Parliament today

 The Congress of South African Trade Unions (COSATU) presented its submission on the Division of Revenue Bill to Parliament’s Select Committee: Appropriations today. The Division of Revenue Bill provides for the allocation of funds to provincial and local governments. These constitute 51% of the national government revenue.

COSATU welcomes some of the positive allocations within the Division of Revenue Bill. These include:

  • A 7.9% increase in funding local government over the next 3 years;
  • R26 billion to upgrade 900 informal settlements;
  • R8 billion towards building the National Health Insurance, R3 billion to employ medical interns and community doctors, and R15 billion to fight Covid-19;
  • R24 billion to fund teacher and educational material shortages and R13 billion to employ teaching assistants; 
  • R18 billion for electrification infrastructure;
  • R11 billion for water and sanitation infrastructure; 
  • R20 billion for public transport;
  • An increase from R4 to R14 billion for free basic services for indigent households; and
  • R800 million to fund the Neighbourhood Greening Grant under the Presidential Employment Stimulus.

There are deeply worrying trends and austerity cuts that will undermine the government’s capacity to deliver badly needed public services, including:

  • A cut in funding provincial government over the next three years;
  • A reduction in the Presidential Employment Stimulus from R24 billion to R18 billion;
  • Below inflation increases in overall healthcare and land reform expenditure; and
  • Below are inflation increases for foster care grants.

The most alarming part of the Division of Revenue Bill is that it is absolutely silent on the chaos and rampant financial mismanagement, collapse in good governance, and ballooning corruption that has come to characterise the public’s experiences with local government. In 2013, 86 out of the 259 municipalities were in financial problems. In 2019, it had risen to 175. In 2022, according to the Auditor-General, it has risen to 90%. Yet the Bill and Budget are silent on what is the government’s plan to fix this crisis.

There are real consequences to the government’s failure to fix local government. Municipal workers are being sent home unpaid. Roads, water, sanitation, and electricity are deteriorating at an alarming pace. Companies are closing, retrenching, and abandoning entire rural towns. Yet it seems our politicians have no idea on what needs to be done. Less than a year after the 2021 local elections, Mangaung Municipality is on the verge of being put under administration.

COSATU hopes that government at all levels will wake up and begin to fix what they have broken before it is too late.

Issued by COSATU.

For further information please contact:

Matthew Parks

Parliamentary Coordinator

Cell: 082 785 0687