COSATU makes its submission on the Division of Revenue Amendment Bill to Parliament

The Congress of South African Trade Unions (COSATU) presented its submission on the Division of Revenue Amendment (DORA) Bill to Parliament today.  The Medium-Term Budget Policy Statement (MTBPS)’s DORA Bill allocates funding to provincial and local government.

COSATU welcomes the additional revenue of R6 billion to various provincial and local governments to recover from the damages caused by the devastating March 2022 floods in KwaZulu-Natal and the Eastern Cape, as well as the Free State, North West, Limpopo and Western Cape.  Whilst appreciating these relief funds, the Federation is worried by reports that many of these funds have not reached those they were intended for.  Government needs to do better in ensuring funds reach their intended recipients and that these are properly communicated to a public exhausted by corruption.

The silence of the MTBPS and the DORA Bill on the many existential crises facing local government is deafening.  The Auditor-General reports on the state of local government are alarming.  Over the past decade, the number of municipalities in financial distress has skyrocketed from 10% to 90%.  The billions of Rands lost to corruption and wasteful expenditure in local government is ballooning with few held accountable.  The rapid deterioration in the capacity of municipalities to provide basic services and infrastructure is causing many companies in rural towns to close and retrench workers, further exacerbating the stagnant rural economies. 

The rising number of municipalities failing to pay workers their salaries and deducting statutory payments from workers’ salaries and then fraudulently not transferring them to their medical, pension funds and tax authorities is deeply troubling.  Currently it has been reported that in the Free State: Kopanong (3 months), Mohokare, Masolonyane and Mafube; Eastern Cape: Beyers Naude, Makana, King Sabata Dalindyebo, OR Tambo and Amahlathi; Northern Cape: Kaheis, Ka! Gareib, Thembelihle (1 year) and Renosterberg; and North West: Ditsobotla, Kgetleng River, Mamosa, Mahikeng (6 months), Tswaing (1 year) and Naledi Municipalities owe their employees salaries and/ or pension and their payments deductions.  The non-payment of salaries and the failure to transfer deductions made from workers’ salaries are criminal offences.  The SAPS and the NPA need to arrest and prosecute those municipal managers for robbing municipal workers of monies owed to them.

The complete absence of interventions by COGTA and SALGA is deafening.  Parliament needs to hold their leadership accountable and take action against such delinquent behaviour.

The call by SALGA for the pending Eskom debt relief to include monies owed by Eskom must be rejected.  Debt relief for Eskom must be directed to ensuring that it is able to free its limited resources to ramp up maintenance and investing in new generation capacity to give relief to an economy crippled by loadshedding.  The relief cannot be used to bail out corrupt and mismanaged municipalities who have collected electricity tariffs from consumers and refused to transfer them to Eskom as they are legally obliged to, nor to municipalities which have entered into debt repayment agreements with Eskom and then failed to honour their obligations.  Whilst some debt may not be recoverable and some debt relief may be necessary for indigent households, if we are to bring the ever rising levels of municipal debt owed to Eskom to an end, then Eskom’s business model must be moved to a prepaid system for all consumers.  This will enable the allocation of free electricity for indigent households to be increased so that relief is directed to those who need it.

It is concerning, that halfway through the financial year and with the festive season shut down weeks away, all provincial governments are far behind their expenditure targets.  This will result in fiscal dumping in the last quarter of the financial year.  This is not a sober way to manage limited fiscal resources for a depressed economy in desperate need of stimulus and rebuilding deteriorating public services.

Issued by COSATU

For further information please contact:
Matthew Parks-COSATU Parliamentary Coordinator
082 7850 687