Urgent joint sitting required on National Treasury withholding equitable share 

22 May 2015

The Democratic Alliance has written to the Chairpersons of the Finance, Co-operative Governance & Traditional Affairs (COGTA), Public Enterprises and Water & Sanitation Portfolio Committees to again request an urgent joint sitting of both Portfolio Committee’s to discuss the withholding of equitable share grants to local government municipalities. 

We will also write to the Select Committee of Finance, Appropriations and COGTA as it directly impacts on provinces to possibly invoke provincial intervention under Section 139(5) of the Constitution. 

According to National Treasury MFMA Circular 75, issued on 9 March 2015, the third tranche of the equitable share funding to some 59 municipalities was withheld in terms of s216(2) of the Constitution of South Africa, pending the approval of a repayment plan to settle each municipality’s arrear debt to Eskom and the various water boards. This is questionable on several counts:

Why is National Treasury acting as the debt collector for ESKOM and the water boards?

Why is National Treasury not enforcing similar drastic action against national and provincial government departments, who owe municipalities in excess of R9 billion?

Why was the drastic action of withholding grant funding (a step of last resort), which is necessary to provide free basic services to indigent households, taken ahead of a more suitable constitutional process such as the imposition and implementation of s139(5) financial recovery plans for each municipality by the provincial executive?

Why have NO provincial executives intervened in terms of s139(5) of the Constitution?

What steps have been taken to ensure the supply of services to indigent and paying households, who are being punished for the faults of the municipality and its council?

What steps have been taken against incompetent municipal officials who are responsible for ensuring the payment of municipal debts to bulk service provide.

Why has ESKOM been allowed to charge exorbitant interest (prime+5%) on accounts 15 days after the date of invoicing? Why has no discussion taken place among the various ministers to address this issue?

The DA recognises the need to ensure that bulk service providers, such as ESKOM and water boards, are paid timeously. We do not, however, support the draconian actions of National Treasury, who acted unconstitutionally, unilaterally and without consultation with the Department of Cooperative Governance and Traditional Affairs. 

The DA will continue to champion the Constitution of South Africa and the upholding of the Rule of Law. We will fight to ensure that the citizens of South Africa are not adversely affected by the incompetence, laziness and maladministration of the ANC in national, provincial and local government.

Joint statement issued by Kevin Mileham MP, DA Shadow Minister of Cooperative Governance and Traditional Affairs and Mergan Chetty MP, DA NCOP Member of Cooperative Governance and Traditional Affairs, May 22 2015