The sections of the National Credit Act of 2005, relevant to this matter, came into operation on 1 June 2007. The provisions of the Act relating to the so-called incidental credit agreements apply to debt-settlement arrangements entered into between a municipality and a consumer of municipal services. Thus, municipalities have to give full effect to the obligations which the Act imposes on creditors entering into what the Act refers to as "incidental credit agreements".
The SA Local Government Association, Salga, and the Department of Provincial and Local Government have analysed the provisions of the Act and have given consideration to the matters which the hon member is raising. Guidelines aimed at ensuring that municipalities deal with this matter in a uniform manner are being prepared. These guidelines are based on legal opinions which have been given and will deal extensively with all the practical implications. The guidelines will also deal with the impact which the Act will have on, amongst other things, the provision of free basic services by municipalities, as well as the implementation of municipal indigent and credit-control policies.
The first draft has already been considered by the executive committee of Salga. The guidelines will be made available to the relevant portfolio and select committees of Parliament once they have been finalised. I might just as well also mention that the public education division of the National Credit Regulator is already providing training to some municipalities to ensure that they implement the Act correctly.
Finally, discussions are currently under way to determine whether municipalities will have to be registered as credit providers. This matter will be finalised shortly. Thank you.
Thank you, Chairperson. Greetings, Minister, and thank you for your reply. The reason why I asked this question was that there are couple of newspaper articles which are fairly alarmist. I was wondering to what extent they are correct. For example, one said that many municipalities will be compelled to write off much of their arrears, because they could be considered reckless lenders in terms of the Act. Another said that, in terms of the Act, credit granters may not allow accounts to run wild, as it is the case in most municipalities at the moment, without realistic expectations of collection.
This is obviously a concern, because as you've indicated the law does apply to all municipalities. It's a bit of a concern perhaps that guidelines are only being prepared now, when the Act came into effect a couple months ago. Perhaps, it would have been advisable for the guidelines to have been produced in advance of the commencement date of the Act. A simple reading of the law suggests that all consumers who are not pay-as-you-go consumers have to have their creditworthiness checked. And, if people are not creditworthy, then credit cannot be advanced to them. So this is a major issue. The issue of bad debt ...
Order, hon member. Your time has expired. Minister, do you have a response?
I don't have a response to a nonquestion.
Chair, I have a point of order, if I may. Well, a point of request if I may.
Okay, state your request.
The normal procedure when you are not in the Chair is that as the member is reaching the end of the minute, the person who is in the Chair says: please phrase your question, or something. When you are cut-off abruptly in the middle of a sentence, it does make it awkward since we don't have a 60-second timekeeper in front of us.
Hard luck, Mr Smith. There are big clocks in front of you. There is a huge one directly opposite you there. You should know the Rules by now.
Chairperson, I hope that my question will be answered. The Minister has answered largely, some of the questions I wanted to ask in terms of the Credit Act and its implications. However, given the social context, there is deep-seated poverty in some areas in certain municipalities. That is the reality. The fact is that many people cannot afford to pay, and we realise that.
However, how is the Minister going to deal with that section of society that has enough money to have all the social enjoyments in life - who have money to attend functions, soccer matches and everything else; they have money for entertainment - but they simply will not pay what is due to the municipality? How do you deal with that? Thank you.
I am not sure about that question either, Minister, but it is up to you.
Chairperson, that's why he was doubting if I would answer that question.
Allegations regarding involvement of Deputy Minister and departmental officials with a certain institute, and receipt of sponsorships by said institute
277. Mr C M Lowe (DA) asked the Minister of Home Affairs:
(1) With regard to the allegations levelled against her Deputy Minister (name furnished) in a newspaper article (copy furnished), what are the relevant details regarding the said Deputy Minister's involvement with a certain institute (name furnished);
(2) whether any other officials of her department are board members of this institute; if so, who;
3) whether the said institute has received any sponsorships from her department or any of its officials; if so, (a) from whom and (b) what was the nature of the sponsorship?