SPEECH BY THE CITY'S EXECUTIVE DEPUTY MAYOR, ALDERMAN IAN NEILSON, WELCOMING DELEGATES TO THE FINANCIAL AND FISCAL COMMISSION 20TH ANNIVERSARY CONFERENCE, August 11 2014
Honourable Thandi Modise, Chairperson of the National Council of Provinces
Mr Bongani Khumalo, Acting Chairperson of the Fiscal and Financial Commission (FFC)
Ladies and gentlemen.
Welcome to Cape Town and to the Cape Town International Convention Centre.
I trust that your time in our city will be enjoyable and that the deliberations at this conference will provide you with a better appreciation of the matters that you have to deal with back home.
Local government has a critical interest in the work of the FCC. Local government is at the starting end of the public's perception of responsibility for the delivery of key services. Often we feel that we are pushed to be the government of last resort when the other spheres of government or other organs of State fail to respond adequately to pressing needs. It is the Ward Councillor who has to face unhappy constituents at their door step, even when they have no decision-making powers over the resources required to address the issues.
Yet local government is at the end of the line in terms of the control over resources and often has to rely on the largess of national or provincial governments.
The construct of the South African Constitution is such that it awards responsibilities to local government that outstrip the resources that are realisable from the taxing powers that the Constitution awards.
This imbalance is a singular structural failure in our otherwise wonderful Constitution.
The balancing process is to be made from allocations from the National Fiscus - a ‘fair share', to be moderated by the Financial and Fiscal Commission.
It is fair to say that local government in South Africa does not view the outcome of the past 20 years in this regard as satisfactory. Stronger language is often heard on this matter as well.
With the strong urbanising trend in South Africa, most of the solutions to poverty lie in our cities, yet resource allocation is still skewed towards rural areas. This leads to a bleeding of our urban economies through not only taxation that does not return to the city economy, but also through inordinate cross-subsidisation of utility tariffs.
If we are to achieve economic progression and the job creation that goes with that, greater emphasis needs to be placed on gearing up resources to our local governments, particularly the cities. So too does the nature of grant allocations need to be freed from over-restrictive conditionality, to enable cities to craft appropriate solutions to urbanisation and the building of efficient cities.
Most notorious in this regard in South Africa is the housing subsidy regime - the very nature of which drives growth towards housing for the poor at the fringes of our cities, rather than towards densified city centre brown-field development, resulting in the growth of the city footprint ever further and the perpetuation of apartheid land patterns.
My appeal to the FCC is that we need a fiscal structure that lends itself to self-sufficiency at local government level, with grant allocations linked to clear outcomes, rather than micro-managed systems of control.
I trust that as you enjoy our wonderful city and see the high level of service provision here, you will not be misled to thinking that all is well in local government, because you will not necessarily find it in the rest of the country, nor does it indicate the risks that we are facing with the changing trends caused by urbanisation.
Your work is urgent. I hope this conference will guide you towards building more sustainable solutions for our country.
Once more, welcome to Cape Town.
Thank you very much.
Issued by the City of Cape Town, August 11 2014
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