House Chairperson, colleagues, hon members of the House, at least during this discussion the temperature will go down a bit. It won't be the same as during the previous discussion that we had on the SABC board.
The ANC conference that took place in Polokwane in December 2007 reiterated, amongst other things, that we must place people at the centre of development. Key amongst those needs that must be taken up is the issue of service delivery that promotes sustainable livelihoods. Our view as a Ministry and a people's government is that in everything we do we need to ensure that local government becomes everybody's business.
This means that with regard to every piece of legislation we bring before this House and every policy intervention we make, we should be able to answer the following questions. How do we ensure that service delivery is enhanced when we do those things? The second question that we must be asking is: To what extent is what we are doing improving the capacity and the capability of municipalities to be able to deliver a quality service to our people?
The Bill we are presenting today, the Local Government: Municipal Property Rates Amendment Bill, is aimed at ensuring that we improve the capability of municipalities in collecting revenue, and ensure that they move forward in whatever they do. One of the major tasks that this Bill is dealing with is to extend the period within which municipalities must be able to get into the net of the valuation roll. Another task is to ensure that municipalities are able to raise revenue that belongs to them, using the old apartheid legislation, until 2011. This means we are extending the life of the apartheid legislation, to be used when we present this Bill here today.
If we don't pass this Bill, the implication is that municipalities will lose an amount of over R400 million. Two thirds of this amount is taken by only two secondary cities. The municipality in Polokwane, the capital of Limpopo, will lose R163 million; and the municipality of Matjhabeng in the Free State will lose R172 million, if we are unable to pass this law.
You will agree with me that property rates and taxes are the second most important revenue generator for municipalities. The first is electricity with surcharges. Therefore, in light of this economic meltdown, every rand and every cent counts towards service delivery. The issue of passing this Bill is at the heart of service delivery, because we are building the capacity of those municipalities so that they can be able to offer services to our people. Therefore it is in our interests, all of us here, to ensure that we pass this law in order to rescue these municipalities. Together we must make sure that these municipalities are able to live up to their challenges, are able to pass their laws, and are able to ensure that they are brought into the net by June 2011.
Parliament is an important instrument. It must make sure that these municipalities, provinces and the department are able to account for managing to get their voters' rolls in place. This will ensure that when July comes there is no other requirement for the extension to take place. As a department we are going to spare no effort. We are going to make sure that these municipalities are able to do what is right and are in the net in terms of the voters' roll.
In that spirit, we want to thank everyone who contributed to the Bill, particularly the chairperson of the committee who led this process diligently, the members of the committee who made contributions and various parties, because this Bill is a Bill on which everybody agrees. It has been agreed to unanimously. That tells us that when we work in this committee, this committee is a committee of consensus. It really implements co- operative governance. We see it in action. In that respect, we are saying, "Le ka moso." [Keep it that way.] Thank you very much, House Chairperson. [Applause.]
Hon Chair, the DA will be supporting the Bill. However, we are having to waste valuable resources and time in bringing this amendment to Parliament because 13 municipalities out of the 283 have failed to implement the Act, in spite of having five years to do so. The vital importance of implementing the new Act and valuation rolls has obviously not been on their priority list.
What is even more concerning is that no early warning systems were in place so that the district municipalities and provincial governments could get involved in providing assistance and capacity. If there were early warning systems, why did the information not filter through? Where were the reports about the noncompliance? Why were we not informed? Where were the MECs of local government to investigate, assist and inform?
These kinds of practices cannot be condoned. It is the property rates today; what will it be tomorrow? Municipalities have gotten away with it, so why not continue the trend? Where is the accountability? Have the municipal managers and mayors been taken to task? Have their budgets been approved? What role did National Treasury play? There are too many questions and not enough answers.
The Minister needs to take provincial governments to task about their lack of commitment and assistance in this regard. There are municipalities that are financially worse off but have still managed to comply. We commend those municipalities. However, we cannot say the same for the likes of Polokwane and Matjhabeng. Between the two of them, they will fall short of rates income in excess of R400 million should this Bill not go through.
There are, however, municipalities that have implemented very eagerly, like that of eThekwini. Their residential properties have been overvalued and ratepayers, especially retirees, have been taxed out of their homes while businesses are not paying their correct dues owing to the low valuations. One would have thought that by appointing valuers at an exorbitant cost of R200 million this would not have happened.
Many phasing-in problems were also encountered, particularly in farming communities where the new valuations made it especially difficult for emerging farmers to operate successfully. Furthermore, the 13 noncompliant municipalities are using valuation rolls that expired on 2 July 2009. This means that the rates that are currently being levied are in contravention of the Act, resulting in the Bill having to be implemented retrospectively.
Residents around the country are up in arms about service delivery. In the past few weeks we have experienced flare-ups in numerous townships, especially in Mpumalanga. The Minister needs to visit these hot spot areas urgently. Inadequate infrastructure, especially in water and sanitation, is fast becoming a problem that will result in an ecological disaster. Vandalism is increasing; damage to council property is on the rise; and the police seem not to be in control of the riots all because of a lack of resources. But who will be footing the bill for the replacements and the repairs?
A referendum was held in Moutse and over 74% of the voters favoured Mpumalanga. Minister, what has happened to the referendum in Matatiele that was going to take place on 12 October? What has happened to the principle The people shall govern, when they are not being heard? And why should the national executive committee be taking such critical decisions without consultation?
In the past months the Minister has only replied to two of my parliamentary written questions, and 25 are still outstanding, Minister. I hope and trust that the Minister will reply to them as a matter of urgency as it is important that we know how local government should be functioning. Thank you. [Applause.]
Hon Chair, it is the responsibility of government and organisations of civil society to educate the South African citizens about the fact that they have rights and obligations. The state has an obligation to deliver good quality services to its citizens efficiently and effectively. The legitimacy of any government is contingent upon its ability to demonstrate to the electorate that it is capable of walking the talk and leading by example.
In spite of the provisions of this Bill, there are large sections of our population that are either unable to pay for services or refuse to pay for them. Both the rich and the poor are of the view that government is unable to uniformly apply this Act across the length and breadth of our country. The poor take the view that properties are being given higher values in order to extract money to pay for inefficient councillors. On the other hand, the rich hold the view that they are being milked further to subsidise the poor without getting real value for money.
It is incumbent upon the government to demonstrate which position is correct in this regard. The majority of ratepayers have no problem contributing to the development and subsidisation of services for the poor, provided that the proceeds of such contributions actually reach the intended beneficiaries and do not slip through the cracks of mismanagement and corruption. The fact that we stand on the platform today to debate this issue is a demonstration of the very lack of capacity and inefficiency on the part of some of these municipalities to honour their national mandate. However, we support this Bill.
Hon Chair and hon members, this is a Bill that needs to be passed by the House. And in so far as its objects are concerned, there is no real controversy. The Bill simply extends the compliance period from four to six years for municipalities to implement the 2004 Local Government: Municipal Property Rates Act. Now, to the extent that there are indeed municipalities that have failed to comply with the new market-based valuation system - and we were given a figure of approximately 13 municipalities which had not made the deadline - it is clearly necessary that they be given time to comply.
The problem, it should be noted, is not primarily one of tardiness on their behalf, but is generally centred on the shortage of qualified valuators to undertake the valuation of all rateable properties in the municipalities. However, of greater significance in motivating the Bill is the fact that because the previous phasing-in period has come and gone, this terminated the legal basis of levying rates other than in terms of the new system.
The legal position, currently, is that these 13 municipalities are technically unable to levy rates, except via the 2004 Act which they have not complied with. Of course, they are continuing to levy rates in practice, but they are legally vulnerable since the levying of rates, other than in terms of the new Act, is expressly prohibited. It needs to be noted that although the objects of the Bill are uncontroversial, in principle the IFP is opposed to retrospective legislation, which we believe is generally, legally and politically undesirable. However, in this instance, we really have no choice and will therefore vote in favour of the Bill. Thank you, Chairman.
Chair, our take on this as the ACDP is that this Bill will allow municipalities to continue to use valuation rolls in their budgeting estimates which, in fact, are outdated in terms of the requirements of the Local Government: Municipal Property Rates Act, that is, the legislature is extending a lifeline to the many municipalities which have not updated their rolls for property revaluations.
The ACDP congratulates the City of Cape Town in this regard as they have already begun a second valuation process. Stalling this process means that municipalities cannot get revenue they should be getting and cannot budget accordingly. This is critical as it delays new infrastructure and compromises service delivery.
Revaluing is both technically and administratively tricky, and a municipality has to meet a number of criteria. For obvious reasons, homeowners who do not intend selling are disgruntled over revaluations because they pay more property tax. So a municipality must do it correctly or face challenges from ratepayers' associations and the like. Of course, just because one's house has increased in value doesn't mean one's income has increased to enable one to pay more. This becomes a problem, particularly in the wake of a property price boom, such as what South Africa experienced prior to two years ago.
This Bill appears to be a straightforward amendment. Fortunately, for the ANC - I don't know if you would have a quorum if you were challenged - the ACDP will support the Bill as there are no serious contentions or concerns raised by stakeholders. Thank you.
Chairperson, the move to approve the Bill allows rates from an old order to form of part of the 2009-10 and the 2010-11 municipal budgets. Also, the Local Government: Municipal Property Rates Act will have extended validity of valuation rolls for another two years.
The UCDP supports the Bill, more especially because it doesn't bear any financial implications for the state and provinces and because proper consultations have been made. We hope that proper implementation, monitoring and valuation will be done. The UCDP supports the Bill. Thank you.
Chairperson, the implementation of the principal Act has been challenged in various quarters, particularly in the eThekwini Municipality owing to the perceived lack of uniform valuation. The MF supports the Bill, but requests that the Minister realise that there are serious flaws in the valuation.
In KwaZulu-Natal there is a delay in the establishment of the appeals tribunal and there are even great discrepancies in the valuations. People must only accept the valuation once it is rectified. This is unconstitutional and unfair. Most municipalities have struggled or rather have failed to implement the Act.
All objectives must be considered thoroughly within the broad framework of a democratic and developmental state, recognising the challenges and disparities of the past. Whilst the Act provides guidelines for the classification of areas to ensure a uniform and fair valuation, some municipalities do not adhere to this. The MF requests the Minister's intervention. We will support the Bill.
House Chairperson, we would like to thank the Minister and his department for responding positively in our interaction with them as the portfolio committee.
This is part of the work we do: to assess and check the implementation of legislation that we pass. And as soon as we pick up problems with the effective implementation of legislation, we raise them with the department and the Minister. As a result, we have this Bill to close the gap that was emerging because of the incapacity of these municipalities, for a variety of reasons, to implement the legislation.
What is important, however, is that if the majority of municipalities have done so, we often call that a relative success. It is the majority. If only 13 or so, even less than 20 municipalities haven't complied, that's still relatively good - but, of course, we would prefer 100% implementation.
In extending this Bill, government and Parliament are not doing so with a blank cheque. We insist that work must be done to build capacity for them to be able to implement this Bill and, of course, other pieces of legislation. We concede that this is a manifestation of some of the problems in those areas and, in fact, we have been talking to the department about this, and part of the turnaround strategy will speak to those issues.
We have also agreed to amend this Bill this way, with the understanding that the totality of the legislation itself has raised a number of problems in its implementation. Residents and municipalities have raised issues with it, and so there is a case to be made for a later, more robust and vigorous interaction with the results of this issue. So, it will come back to Parliament for broader debate and discussion.
The issues that some of the members have raised are valid, especially the positive reasons given by the hon Dudley about why it is important to allow this amendment and what it is that municipalities must be able to continue to do in the interests of service delivery in the areas in which they have jurisdiction. That is a very useful point to make.
As to what the ANC expects, we have made it very clear that the purpose for which we are doing this is to build these municipalities' capacity to be able to carry out their functions, working with them in a collaborative manner, co-operatively, to produce the results that the residents themselves will see and appreciate.
With these words, I would like to say that the ANC fully supports this Bill and we are convinced that subsequent and further discussions will improve the capacity for the implementation of legislation across all municipalities in future. Thank you very much. [Applause.]
Thank you very much, House Chairperson. I want to thank colleagues for their good engagement and discussion on these matters. By way of free education I want to say that there are 257 municipalities in South Africa that have the right to rate property, not 283. The reason is very simple: Some of them are district municipalities; therefore they are not allowed to collect rates and taxes.
The other matter that I want to raise is that there are areas that are undervalued and overvalued. One of the important things is that Parliament is the body that represents the interests and aspirations of South Africans. That being the case, parliamentarians cannot complain that they don't have the ability to make government account to them. My advice, which is free, is that members must go to those areas and make those municipalities account to them - because you are not helpless in the way you have tried to project yourselves in this debate. You have the right to ensure that any sphere of government accounts to you and that they do the right thing.
The other issue is about Matatiele and Moutse. I have clarified that matter. We have said that processes have been undertaken in Moutse, and we will be processing it in Matatiele, Mothibistad between the Northern Cape and North West and also Balfour, which we will still go to.
You are the people who have to effect any changes that are required. We can't change the Constitution willy-nilly, or at the wink of an eye. We need to respect the Constitution. When we make changes, they must be changes that are required. That is why it cannot be done when it comes to each and every cross-boundary municipality or province. I think we must really look at the question: Do we really need to put issues of changing the Constitution in the Constitution or should they be in the law? This is so that we do not make these boundaries as hard as they are.
In conclusion, I want to thank the members again for their contributions. We have noted the points that they have raised. I concur with the chair of the committee, the hon Lechesa Tsenoli, in that next year we will call upon you to be part of the process, because we will be doing a comprehensive review of the Local Government: Municipal Property Rates Act, including with regard to the people in rural areas who are raising issues. They will be touched upon, as will farmers. I think uGatsheni will agree with me that even the areas of the IFP will be touched on when we deal with this issue.
Therefore, fasten your seatbelts. We will be there. We are about to take off. Thank you very much. [Applause.]
Debate concluded.
Bill read a second time.