Municipalities talk money
The Western Cape Member of Finance Forum 2017 was held in Rawsonville recently. At this forum, financial officers from various municipalities in the Western Cape strategised around financial issues in the province.
The Provincial Minister of Finance, Dr Ivan Meyer, was the keynote speaker at the start of the event.
In his opening remarks, Meyer said the national shortfall of R50 billion in revenue for this year is devastating.
“It is devastating to run an economy like this,” he commented.
The national debt is expected to reach 61% of the Gross Domestic Product (GDP) by 2022, where it was only at 23% in 2009.
“We are a country in crisis in terms of national debt,” he said, adding that the total debt in South Africa is an R2 trillion.
According to Meyer, debt service cost is the fastest growing item on the expenditure budget and this, he says, is killing South Africa.
The Division of Revenue Act (DORA) allocates 9,2% to municipalities to cover the cost of delivering basic services to the poor.
“This is too little,” he says. “This is definitely not enough money. More money should go to municipalities.”
Furthermore, says Meyer: “I don’t accept that there is no money. I do, however, accept that there is more money but we need to get our fiscal strategy in place. The state of mismanagement is just simply shocking.”
While speaking on the implication of the current economic and fiscal environment he briefly touched on farm murders, saying: “An attack on a farmer is an attack on our food security. It is so simple, you kill a farmer, you kill a source of life. But at the same time, people on the Cape Flats are dying as a result of gangsterism so we must be firm in protecting our citizens.”
Meyer goes on to say water is his second responsibility under this heading.
“You cannot use municipal, quality drinking water to mix cement – we have to think very deeply about construction.”
He also touched on policy principles underpinning the Western Cape Government. Constitutionalism is one of the points.
“Constitutionalism means we cannot ask municipalities to build dams,” Meyer points out, “as it is not their constitutional responsibility. It is a municipality’s job to provide water to taps.”
He also spoke in depth about one specific project, OneCape2040, the Western Cape agenda for joint action on economic development.
“This focuses on connecting various municipalities in the Western Cape,” he said. “That’s why we are connecting 1 400 buildings across the Western Cape through our digital platform.”
Further, Meyer says he believes the economy must be grown to support enterprises.
“We need to be innovative,” he says. “If there is a crisis we must turn to innovation. We must be seen as a learning Cape, a leading Cape, a living Cape.
“We cannot commit in the future to build free RDP houses because building free RDP houses is going to kill municipalities. Bonginkosi Madikizela, MEC for Human Settlements and the provincial leader for the DA, is announcing a shift away from the free RDP housing to informal settlement upgrading. This has direct implications for municipalities. We are interested in the sustainability of municipalities.”
Meyer also discussed fiscal consolidation, where he advises municipalities to reduce their expenses and increase their income.
Source: Worcester Standard News