The Congress of South African Trade Unions (COSATU) remains extremely concerned by the lack of a comprehensive package of interventions to stabilise and rebuild the alarming number of financially distressed municipalities.

The Federation notes tentative progress with 42 delinquent municipalities responding to National Treasury’s temporary withholding of their Equitable Share Grants and the staggered release of these payments to them.  The absence of plans to respond to Treasury’s call for actions from the remaining 17 municipalities is staggering.  Equally worrying is the seemingly pedestrian approach from the South African Local Government Association (SALGA) to the deterioration of municipal governance and even the collapse of basic services in countless municipalities under its lackluster watch.

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, deeply worried about the unintended potential consequences of withholding payments to municipalities with 21 of them 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 SALGA to put in place interventions to resolve these ever-worsening crises.  Withholding conditional 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 Auditor-General plus the Hawks and the SIU, a new municipal funding model is put in place, and external support is deployed from Eskom, the Water Boards and SANRAL to maintain critical infrastructure and restore basic services and billing collection capacity.

If these municipalities are to be stabilised and set back on the path of recovery, then the municipal debt crisis must be tackled with a massive R218 billion owed to these 69 municipalities alone.  This is critical to tackling R97 billion owed to workers’ pension funds and other third-party payments, the South African Revenue Service, Eskom and Water Boards.  This must include targeted actions to ensure the urgent recovery of R11 billion and R46 billion owed by state institutions and the private sector respectively to these municipalities.

Local government remains the state’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 pickpocketed.  COSATU with its affiliate, the South African Municipal Workers’ Union (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.

If we are to turn the corner in local government, it is incumbent upon all political parties to end the culture of mediocrity and to deploy Councillors equipped with the necessary skills, integrity and sobriety.

Issued by COSATU

Matthew Parks (COSATU Parliamentary Coordinator)

Mobile: 082 785 0687

Email: matthew@cosatu.org.za