The Congress of South African Trade Unions (COSATU) demands urgent interventions to resolve the alarming crises facing financially distressed municipalities.  The Federation shares its affiliate, the South African Municipal Workers’ Union (SAMWU)’s deep concerns about the latest developments facing local government, in particular Treasury’s announced withholding of equitable share grants to 69 delinquent municipalities. 

COSATU appreciates the need to install financial discipline in these errant municipalities, in particular to ensure that they honour their payment obligations to workers’ salaries and pension funds, Eskom, Water Boards and other third parties.  We are however extremely worried about the unintended potential consequences of this withholding, namely that some of these municipalities are so financially cash-strapped that this action may cause some basic services to grind to a halt and leave many municipal workers unpaid once again.

It is critical that urgent engagements take place between Treasury, the Department of Cooperative Governance and Traditional Affairs (COGTA) as well as the South African Local Government Association (SALGA) to put in place interventions to resolve these ever-worsening crises.  Withholding equitable share grants is only a punitive tool and does not resolve the systemic faultlines that have brought many municipalities into severe financial difficulties.  A comprehensive package of interventions is needed to ensure competent management is appointed, corruption and wasteful expenditure is dealt with the assistance of the Hawks and SIU, a new municipal funding is put in place, and external support is brought in from Eskom, the Water Boards and SANRAL to maintain critical infrastructure and restore billing collection capacity.

Municipalities remain government’s Achilles’ heel with little signs of a turnaround.  It is key that these interventions do not lead to a further collapse of municipal services or see more workers sent home unpaid.  COSATU with SAMWU will continue to engage government on a package of short-, medium- and long-term interventions to set local government firmly on a path to recovery.  This is a ticking time bomb that cannot perpetually be kicked down the road.

Issued by COSATU

Matthew Parks (COSATU Parliamentary Coordinator)

Mobile: 082 785 0687

Email: matthew@cosatu.org.za