The Portfolio Committee on Corporative Government and Traditional Affairs is concerned about the arbitrary action taken by the National Treasury to withhold equitable share allocation of 60 municipalities mainly in Free State, North West and Mpumalanga provinces.
The Departments of Finance and Corporative Government and Traditional Affairs (CoGTA) as well as the South African Local Government Association (Salga) briefed the Committee on Tuesday regarding this matter.
Members of the Committee, together with Salga, wanted to know which legislation the National Treasury applied to withhold equitable share allocation payable to the concerned municipalities, saying that the allocation is not a conditional grant.
“Equitable share is meant for bulk services to indigent households and cannot be used as a conditional grant. Withholding it would affect service delivery at the community level, which could result in unintended consequences of vandalism of municipal property through protests,” said Mr Richard Mdakane, Committee Chairperson.
However, the National Treasury could not provide the specific legislation it used to take this action.
Mr Mdakane reiterated that the Committee would reconvene another meeting in which the Ministers of the Department of Finance, Corporative Government and Traditional Affairs, and Water and Sanitation, will be invited together with the management of Eskom in order to get a solution to this matter.
National Treasury has, with effect from 20 March 2015, withheld the transfer of equitable share allocation payable to municipalities due to their failure to honour their financial commitments to Eskom and water boards, in line with Section 65 (2) of the Municipal Financial Management Act, 2003.
The concern of the Committee points to the fact that National Treasury resorted to drastic measures and did not follow procedure.
Source : Parliament of South Africa