The repeal of the Remuneration of Town Clerks Act, Act 115 of 1984, and the implementation of the new system of local government in December 2000 meant that a new system came into effect that gave municipalities greater latitude on the appointment of municipal managers.
The new system did not, in fact, place a ceiling on the salaries of municipal managers, partly because it was understood that different councils or municipalities would have different budgets and would have different room to pay municipal managers.
It is also partly that we recognised that municipalities often have to compete with the private sector for those who carry the skills that municipalities require to play the role of municipal manager.
So we gave them some latitude through the national legislation to negotiate packages specific to their needs, depending on which municipality it was. In that regard, it has to be drawn to the attention of the House that with the new system the municipal managers could serve terms of up to five years, with renewable contracts. Again, because they were not permanently employed, it meant their packages had to be handled differently.
However, with our experience since 2000, we recognised that this was not working out. The Local Government: Municipal Systems Bill, passed by this very Parliament, is now the Local Government: Municipal Systems Act, Act 32 of 2000, which was promulgated. This provides for the Minister to regulate the basic conditions of remuneration applying to municipal managers, and that is what Co-operative Governance and Traditional Affairs, Cogta, is currently doing. In fact, within the next two weeks we hope to gazette the regulations that flow from this Act, and part of this will seek to address this very issue.
However, I must stress that there are constitutional and other legislative constraints on how far national legislation or regulations can go in this regard. So, we are bound by the constitutional constraints and I urge members to understand that it is not as if we can solve the problem overnight by means of regulations.
Speaker, there is a popular perception, particularly in the very poor rural municipalities, that salaries for senior management can be rather generous compared to what's being delivered. However, there is another concern, which is my question to you, that generally remuneration, salaries and so on often constitute too high a percentage of operating budgets. To what extent does the department share the view that this is a serious challenge that needs addressing, and what is the department doing about it, that is, constraining salaries and remuneration costs to a reasonable figure?
As the hon member will know, this is a matter that Cogta has been preoccupied with. We agree that the personnel costs in municipalities in general are far too high. However, my understanding is that over the past few years they have come down, although they haven't come down to what I think the National Treasury standard is, namely 30% of the budget of a municipality. We are concerned about ensuring that that happens, that the money is used for service delivery and development, rather than for personnel expenses. In fact, this Local Government: Municipal Systems Amendment Act that has just been passed by this House is partly designed to ensure this.
On its own, obviously it wouldn't do it, but this is part of the process that we have set out for the committee that Mr Smith serves on and which we are seeking to achieve over the next two to three years. So, yes that is our goal. It is not as if no improvement has occurred and it is certainly true that we have room for more improvement.
Again it comes to this, that local government, in terms of the Constitution, is a sphere of government, and, as much as it's part of an integrated co-operative governance system, we all have to agree that we might have to look at the Constitution to see how we can ensure that the national sphere can more proactively intervene in municipalities without, of course, eroding their powers.
What monitoring will the Minister implement to ensure that the salary structures in municipalities are appropriate to the grading of the municipality and within the financial means of that municipality, unlike Renosterberg in the Northern Cape?
Well, that again is covered by my earlier responses. It is covered in part by the Local Government: Municipal Systems Act, Act 32 of 2000, the regulations to which are being gazetted in the next two weeks, and we look forward to the comments of the hon member and those in the committee on those regulations. Perhaps we should take it to the committee in its draft form and they can engage around it. But these are the very issues that Cogta is concerned about, so I don't think there is any major difference between what the hon member is raising and what we ourselves at Cogta feel.
Hon Deputy Minister, many people believe that the poor service that is rendered by a large number of municipalities does not justify the exorbitant salaries that are paid to some municipal managers. We wonder how one can justify a salary that almost equals that of the President when problems such as potholes, incorrect billing, dirty streets and buildings, and poor infrastructure are not properly addressed. Also, when traffic lights are not working, one seldom sees traffic officers helping to control the traffic.
So, my question to you, hon Deputy Minister, is this: What is the job description of managers that justifies the salaries of more than R1 million that are paid, when they cannot ensure that efficient basic services are rendered to our communities? Thank you.
With due respect, it's the same question asked in a different form. I'm not sure what more I can say. I'm not sure if there are any rules or guidelines that guide a reply. I will say it again, if you will kindly refer to the record, you will see I have answered your question.
But if you want to know a bit more, I must summon to my aid something that occurred to me a moment ago, which is that we in these very regulations are actually trying to address that issue.
We are also aware that there are situations, for example, in very challenged rural municipalities, where if you want to get an appropriate person to be the municipal manager, you have to compete with other municipalities like Johannesburg, eThekwini, Cape Town and so on. Sometimes it may well be the case that in a poorer, more financially challenged municipality you might have to have a municipal manager who is, frankly, more highly paid than somebody who is managing Johannesburg, because the challenges are so much more onerous and it is difficult to draw people to the smaller, more rural municipalities.
In short, I think, with due respect, that the same questions, Mr Speaker, are being asked in different forms. So can I plead with members that before they ask a question, they listen to the previous answers so that we save a lot of time. Thank you very much.
Sekela likaNgqongqoshe, ngivumelana nawe uma uthi umthetho okhona okwamanje uyavumelana nokuthi omasipala akube yibo abathatha izinqumo zokuthi abaphathi bomasipala kufanele bahole malini.
Mhlonishwa, ngabe uyavumelana nami ukuthi njengombuso osathuthuka ake sinike le mithetho ekhona ithuba lokuthi siyibone ukuthi isebenza kanjani, singajahi ukuholela abaphathi bomasipala imiholo elinganayo kanti izimo abasebenza ngaphansi kwazo azifani.
Ngokombuzo kamhlonishwa uBotha kungathatha isikhathi esingakanani ukuze sibe nosichibiyelo somthetho wokuthi abaphathi bomasipala bahole amaholo alinganayo ngokusebenza kahle kwabo? (Translation of isiZulu paragraphs follows.)
[Ms D G NHLENGETHWA: Deputy Minister, I agree with you when you say that the current laws make allowance for the municipalities to make decisions on how much municipal managers should be paid.
Hon member, you should be agreeing with me because as a developing state we must give these laws a chance to see how they work - we should not jump into paying the municipal managers the same salaries because the conditions they work under are not the same.
With regard to hon Botha's question, it can take time to amend the law that says municipal managers must be paid according to their good performance.]
The hon member has raised questions that tread on a longer-term consideration that I think we who are concerned with this issue all need to apply our minds to, which is that we are looking into a single Public Service.
One of the reasons for that is the possibility that in time to come we might have to move some of the directors-general, DGs, we have at the national level and their counterparts at the provincial level to local government.
If we are serious that local government is the main area of service delivery and development, and that without a successful, effective local government system this democracy won't work, it might well mean that in future we will have to pay municipal managers higher salaries.
However, those salaries will not necessarily derive from their respective budgets. There might be a consideration that as we move towards a single Public Service, the national fiscus might have, over time, in a temperate, moderate way, to consider giving municipalities some sort of allowance to pay municipal managers of the necessary quality and skills, who will obviously demand higher salaries in the market.
So, I think this issue is quite complex and, as we are reviewing the model of local government, and as we are beginning to look at a new, more integrated co-operative governance system, these issues need to be looked at more strategically - member, I think you are raising broader issues - and it may well be that we have to move people from the national sphere to the local sphere, which means, of course, that they will have to be paid appropriately.
So, I think there are broader issues here, and we shouldn't get too preoccupied with some of the immediate issues which are being addressed in any case. They are part of our overall strategy that we are seeking to achieve over the next five years and more. Thank you.
Progress in improving quality of funding municipalities
73. Mr S L Tsenoli (ANC) asked the Minister for Co-operative Governance and Traditional Affairs:
What progress has been made in respect of measures to improve the quality of funding municipalities, with particular reference to district municipalities? NO2312E
Question 73 has been put by the hon Mr S L Tsenoli to the Minister for Co-operative Governance and Traditional Affairs. Hon Deputy Minister, this is your day!
Well, actually it is my Minister's day - I am merely here on his behalf!
Nevertheless, the Department of Co-operative Governance and Traditional Affairs, as you know, Mr Tsenoli, is responsible for the administration of the municipal infrastructure grant, the municipal systems improvement grant and, of course, the local government equitable share.
The amount of funding to local government in terms of both the local government equitable share and the municipal infrastructure grant, has steadily increased over the years. Minister Manuel and Minister Gordhan might think it is simply that they are being kind, but actually it is pressure, not least from the hon Tsenoli's portfolio committee, that has put this on the agenda, and also a recognition of the importance of local government.
The equitable share, mind you, has increased from R25,5 billion in the 2008- 09 financial year to R34,1 billion in the current financial year. The municipal infrastructure grant has increased from R4,4 billion in 2004-05 to R11,4 billion in 2011-12.
There is, of course, no specific amount for funding district municipalities directly, though the structure and formula of the local government equitable share takes into account various criteria, including the number of poor households, the number of households without access to basic services, the cost of basic services and other considerations, and so too with the municipal infrastructure grant. The formula takes into account the backlogs and the powers and functions that different municipalities have, as against the local and district aspects, and so on.
Obviously, the issue of what funding is appropriate for the districts is related to the broader issue of what happens to the two-tier system in local government. The Department of Co-operative Governance and Traditional Affairs will soon be bringing to the public, over the next year or so, a discussion document around aspects of the model of local government that we think should be reviewed. So the issue of how you fund districts is also related to the broader issue of what the future role of district municipalities is, which is far from being finalised, and we certainly need a debate around it. Thank you.
Deputy Minister, as much as we can understand as you respond that the amount of funding to local government in terms of both the local government equitable share and the municipal infrastructure grant has increased, given the experience that we have, we are convinced that many district municipalities have sufficient resources and are performing very well. So they can give necessary support to weaker local municipalities.
Deputy Minister, do you agree with me that proper funding to district municipalities, which will be determined by the population and the number of households in that area, will assist in improving service delivery, especially to smaller and rural municipalities that are battling to generate revenue and are relying solely on grants? Thank you.
Yes, I agree. In fact until the issue of what happens to district municipalities is resolved, which I imagine will happen sometime in 2013, we think the role of the districts, as they are currently constituted, must be effectively fulfilled. We agree that more money should be allocated to them. We think that it may well be that in 2013 we might decide, after this huge debate, that we actually want a stronger district municipality system.
Yes, in the interim more money could be allocated to them, but again it comes down to this, that it is not a question of money. It is also a question of using the current allocation of funds and other resources to district municipalities effectively and more productively. Moreover, it relates also to the relationship between local and district municipalities.
They are not distributing the powers and functions between local areas and districts optimally, and are not co-operating to the extent that they should. Clearly, they must be more effective. The answer does not reside simply with more money and resources. It also resides in making more effective use of the current model. Thank you.
Chairperson, the figures that the Deputy Minister quoted in regard to equitable share and all that are great. It is good to see the figures rising phenomenally. However, I think there has been a much broader question raised many a time over the last 15 years about the funding model itself. I am not asking a question related to district councils particularly, but the funding model as a whole.
To what extent is government serious about reconsidering the present funding model, and the equitable share in particular? We hear a rumour that there is a summit planned for next year where this issue is going to be addressed, perhaps for the first time seriously. If so, could the Minister indicate what the agenda is, who the participants are, and what kind of outcome is expected from that summit? Thank you.
Yes, as you should well know, hon member, we have addressed your committee on many occasions, and have referred to the structure that exists. It comprises the National Treasury, other stakeholders, not least the SA Local Government Association and us. The aim is to review the model.
The Minister of Finance has gone on record as saying that the formula of the local government equitable share model needs to be reviewed. There is agreement on the National Treasury side that we should do this. In fact, that is what we are doing. We will be holding the Intergovernmental Fiscal Review Summit, which you have referred to, and the tentative date set for that is February 2012. Tentatively also there will be preparation for that summit in September this year. The relevant officials and other stakeholders will be brought together.
The aim is to look at the entire intergovernmental fiscal system. But clearly we have to look at the entire intergovernmental relations system too because you can't talk about funding without talking about the model that we are moving towards. So, some of the financial issues will not be resolved until the issues regarding the new model of local government are adequately addressed.
Mr Chairperson, I am glad the Deputy Minister appears to realise that if money is being improperly spent, there is no point in adding to the amount of money that is given.
I would like to know, firstly, what measures the department is putting in place to ensure that when money is spent on capital projects there is proper oversight. I draw the Deputy Minister's attention to the experience of the portfolio committee's recent oversight visit to the Free State, where the portfolio committee actually put a stop to two projects which were under way using inferior materials not approved by the SABS. In other words, there was no local oversight of the projects and money was being wasted in those two cases.
Secondly, what is the department doing to ensure that when misspending occurs, councillors and officials involved are held accountable? I say this because there is a great deal of misspending but very little action. So, it is no real surprise that misspending and corruption continue. If you take, for example, the case of the O R Tambo District Municipality in the Eastern Cape, where the mayor used district funds to purchase farms in KwaZulu- Natal and appointed her husband to manage them - which he did, badly - the mayor has now been promoted to MEC!
So, the third part of my question is: What kind of message does that send?
This issue is also one of the issues that we have to address in the summit that we are speaking of.
Clearly, we have three spheres of government. Your party would be the first to get excited were we to say that the national and provincial government should be far more proactive. You would insist on the autonomy of municipalities. On the other hand and in the same breath you would insist that the national government, like Big Brother as it were, intervened and effectively took over the role of municipalities.
In the first instance, there are the Local Government: Municipal Systems Act and the Local Government: Municipal Structures Act, which clearly provide for oversight of these projects and any activity in terms of the integrated development plan, IDP, by councillors and officials.
They also provide for a ward committee system and other forms of community participation. So the public needs to be more active and, as you well know, Mr Lorimer, we are reviewing the ward committee system to make it more powerful, effective and better resourced. These proposals have come to your committee and will be taken further in the next six months.
The second point, may I stress, is something you are familiar with. The MEC for local government in a province takes the immediate responsibility for overseeing the performance of municipalities.
The third point is that on the agenda of Cabinet at the moment is what we call the Monitoring, Support and Intervention Bill. It seeks to give effect to section 139 of the Constitution to provide for a far more proactive intervention - by provinces in the first instance, but by national government also - in local government issues, especially where a local government municipality is not performing the way it should. However, we are not seeking by this means to erode the basic powers and functions of municipalities. In fact, what we are seeking to do is to strengthen municipalities by ensuring more integrated and more effective co-operative governance.
In respect of the last tranche of your question, I am not very familiar with the issues, but from what I gather there is no evidence for the allegations that have appeared in the public domain. There was an investigation and the outcome was that there was no evidence to suggest that the mayor concerned had actually done anything wrong. The decision to promote her is something you should address with the provincial executive committee of the ANC, and I can give you the address. It is not a question to put to Parliament. Thank you.
Deputy Minister, it is clear that, based on the report of the Auditor-General, the irregularities that municipalities are subject to, where they have qualifications in their financial affairs, have been increasing. Of the 177 municipalities inspected in the 2008-09 financial year, qualifications on the basis of unauthorised, irregular and wasteful expenditure accounted for 13% only in that year. However, the following year that number increased to 77% of municipalities refused qualifications on capital assets, 75% on current assets, and 75% in the category of liabilities. So there is no improvement. The situation is getting worse. What is the department doing to improve the situation?
In the first instance, the Auditor-General himself, who is independent and whom you have a lot of respect for, I know, says that there is improvement. The facts speak for themselves - there has been a marginal improvement over the last three to four years. But clearly, if you look at the goals of Operation Clean Audit, the progress that has been secured over the last three years is nowhere near what is necessary. I think we agree on that.
As for what we are doing, I refer you to my earlier replies, and just remind you in a nutshell that it is bringing together the Auditor-General's office, the SA Local Government Association, the Development Bank of Southern Africa, DBSA, us as the Department of Co-operative Governance and Traditional Affairs, and other relevant stakeholders to actually have an intensive programme to address this issue. It will not happen overnight.
We are very clear that the better municipalities manage their finances, the better they are able to improve service delivery and development, and the reverse applies. The more focused they are on service delivery and development, the better they will manage their funds. So we are in agreement that it needs to be improved, but we certainly don't agree that there has been no progress, not at all. Mr Botha, you know for a fact as well that there has been improvement. What you are focusing on is only one element of the report, without looking at the report as a whole. I refer you to what the Auditor-General has said in the public domain. He also, by the way, insists that while the progress has been marginal, it is certainly the foundation on which Operation Clean Audit targets can indeed be achieved. So actually he himself says that he is quite optimistic, based on the achievement of the limited progress we have had over the last three years.
Position regarding possible amendment of definition of residential properties, and the impact of such amendment
77. Mr J R B Lorimer (DA) asked the Minister for Co-operative Governance and Traditional Affairs:
(1) Whether, with reference to his Deputy Minister's statement (details furnished) on 18 July 2011 in respect of the amending Bill to the Local Government: Municipal Property Rates Act, Act 6 of 2004, he intends to amend the definition with regard to residential properties in the amending Bill before tabling it in Parliament; if not, what is the position in this regard; if so, what will the proposed change be;
(2) whether he has conducted a study on the impact that the specified definition of residential property will have on (a) municipal revenue, (b) tenants, (c) the property market and (d) retired citizens whose primary income is from property rentals; if not, why not; if so, what are the relevant details in each case? NO2316E
Chairperson, it is, of course, not the intention of the department to subject the additional properties, beyond the first of the house owners of residential properties, to commercial or business rates, as we have repeatedly made clear, Mr Lorimer, and as you yourself well know. On this issue we keep saying to people that there was an ambiguity in a particular clause. If you read the Bill as a whole, however, it is very clear that it was never the intention of the Department of Co-operative Governance and Traditional Affairs, Cogta, to subject residential properties to commercial or business rates.
However, if people use a house or a residential property for business purposes, and if it is beyond a small, let us say, emerging business, the municipality has the right to levy property rates according to business tariffs, if that residential property is used for a business of a significant scale. The decision about what is "significant" will obviously be made at the local level. So, it is not our intention, as you well know.
As Cogta we want to stress that it is like saying, "We do not believe there are purple ducks." Then people say to us, "Okay, that is very clear. Now tell us, do these purple ducks have three wings?" So we say, "No, no, no, Cogta doesn't believe that there are purple ducks. So the issue of whether they have three wings or three legs does not arise." Then they will say, "Yes, oh, that's clear." Then they will ask, "Now tell us, these purple ducks, is it true they come from Mongolia?" Then we'll say, "No, no, no. We have said to you we don't believe there are purple ducks." Then they say, "Oh, that's clear." Then the next question is, "Deputy Minister, can you respond to the view that these purple ducks can make the water in the ponds in the park poisonous?" And then you say, "No, no, no, but we're telling you we don't believe there are purple ducks. So the issue doesn't arise!" [Laughter.]
Mr Lorimer, will you please not ask another question like that? There are no purple ducks! [Laughter.] Cogta doesn't believe there are purple ducks! So, to answer your question: it was never our intention, and if there is any misunderstanding that we feel that there are purple ducks, we will clarify it. Let me make this clear: Cogta does not believe that there are purple ducks and if there is anything in the legislation that implies that, we will clarify it. We will decide on the wording in the next two weeks. Thank you.
A couple of years ago, the hon Trevor Manuel raised the issue of hens' teeth or hens with teeth. We pointed out to him that there are indeed hens that do have teeth. I would like to say to the hon Deputy Minister who has just been speaking, that he should be extremely careful about talking about no purple ducks with three wings, because I am sure that we can prove to him very substantially that there are such things. [Laughter.]
Thank you, Mr Chairman. Deputy Minister, I think you may have ducked the question! [Laughter.] You keep using the phrase, "as you well know". Well, if I did know, I wouldn't be asking the question. Your answer was interesting and entertaining, but I am afraid not that illuminating.
I still need to ask. Can I give you a hypothetical case? There is somebody who owns a second property, a holiday flat down at the coast, and they let that flat for one or two months a year. Is that flat now going to be re- rated?
Chairperson, Cogta wants to repeat that we do not believe there are purple ducks. To answer the question more specifically, no, as he well knows.
I say this because in the question he put to my Minister he, in fact, attached the statement issued by Cogta which appeared in my name. I made it very clear there that the second, third or fourth residential property of a house owner would not be subject to property rates that apply to commerce or business. I even said this in my reply right now, Mr Lorimer. I will go much slower this time and I hope the Chairperson will give me the time ... I am saying again, that unless it is a substantial business and not a small one, you will not have commercial or business rates apply to that property.
Mr Lorimer, obviously if you own a house ... the one in Umhlanga Rocks is safe! Don't worry. If you hire it out during the holiday season or when the tourists want to come to your place during the off-tourist season, you will not be paying commercial or business rates, but only those that apply to residential properties.
You must have heard me on radio. I think I have spoken 18 times, on the smallest radio stations. On one of the indigenous language stations in Limpopo I spoke in English and they presumably translated. I have also spoken on SAfm. We have said it so many times, but I want to tell you once again that we as Cogta do not believe that there are purple ducks. Please believe me. Thank you.
Deputy Minister, I would like to know whether the possible amendment to the Bill to deal with the definition of residential properties will in any way prejudice the citizens of this country in regard to municipal property rates. If not, how will the amendment clarify the benefits?
Yes, we have agreed that we will amend the ambiguity. Exactly what the wording will be will depend on the submissions we have received. In fact, we want to stress that before any hoo-ha was made by the opposition parties about this, we had already identified that there was some ambiguity there. So it is a matter of just tweaking a few words.
Chairperson, underlying this all is the fact that some of the questions that are being raised are not genuine concerns about the particular ambiguity in one clause, so much as the fact that many people out there, who are being mobilised in a particular way, want to reopen and rehash issues that were dealt with in 2003 and 2004 when we dealt with the original Local Government: Property Rates Bill. In fact, we spent over 320 hours on that Bill in formal sittings. Apart from the TRC Bill, at least until that stage, it was the Bill that had been most exhaustively dealt with. We also spent another 100 hours in informal sessions. What people are doing in our public exchange is they are bringing up all those old issues.
We understand that people are feeling anxious about paying property rates, especially in a climate where there is an economic challenge, and people are worried about nationalisation and so forth. Of course we understand that. We have said, as I say again on behalf of Cogta, we will make the necessary amendments and it will be very clear.
Of course, Parliament will make the final decision. The Bill is merely gazetted for public comment at this stage. Mind you, we had nine provincial public hearings even before the gazetted version was processed. We now have a large number of submissions, mostly around this particular clause. We will address them in the next two weeks. We are expecting the Bill to be in Parliament by the end of September. Mr Lorimer and everybody else will finally decide. May I remind you that the power does not reside with my Minister but with Parliament.
Progress made by government regarding debt payment to municipalities
74. Mrs W J Nelson (ANC) asked the Minister for Co-operative Governance and Traditional Affairs:
What progress has the government made with finalising payment of its outstanding debt to municipalities? NO2313E
Chairperson, the municipalities, of course, are owed about R64 billion by households, government and businesses. Government owes municipalities, sadly - shamefully, I might add - 4%, amounting to some R2,9 billion.
National Treasury, through their provincial treasury forums, looks at the debt owed to municipalities. The report, however, focuses on what is owed and very little attention is given to the payment of the debt, although this is increasingly being attended to. In fact, only yesterday in our Cabinet Committee meeting we discussed this very issue. Deputy Minister Nene made a submission about a report that is going to be in the public domain, I think, in the next month or so.
A task team has been established, comprising the Presidency, the National Treasury, our department and the Department of Public Works. The team has developed an action plan to systematically resolve the outstanding government debt and they also have a pilot project going in eThekwini Municipality and the King Sabata Dalindyebo Municipality in the Eastern Cape. The lessons learned from this pilot project will also be applied more generally, so that municipalities are better able to secure the funding that is owed to them.
Obviously we are improving the revenue enhancement strategies of municipalities, the billing systems and so on. In respect of government departments, sometimes they say, rightfully so - and sometimes it is just an excuse - that the billing that they have been given is not accurate, so the government departments are unable to pay.
The issue of securing the funds that are owed to municipalities is directly related to the issue of improvement of the billing systems of municipalities and we are giving attention to both. This is a big issue and we would like Parliament to take this up more stridently. We would also like the parliamentary committees, both in finance and our committee, to take this up more and more. This is a big issue and we look forward to Parliament's playing a more active role in this regard. We welcome the question, obviously. Thank you.
Thank you, Deputy Minister, for your response. Are you able to inform us when you envisage having this debt to municipalities settled or at least down to 30 days? More or less what type of timeframe are you looking at? Thank you.
Chairperson, I am afraid that is a very challenging question. This issue has been with us almost since 1995, if I may say so. To expect that that R64 billion debt will dissipate over time is extremely difficult to entertain, frankly. It is a question of reducing the debt.
Also, we must recognise that some of the departments and some of the debtors of municipalities, like schools, clinics and the like, just don't have the resources. This too is an issue that will be addressed by the summit I referred to, hon member.
It is not something that we can resolve overnight. What we can seek to do over time is to reduce the debt. Maybe - I am speaking through my hat, as it were, if there is such an expression - we should seek to have a target, maybe 10% or so, over the next few years. Expecting that the target will dissipate or disappear, or that the debt will evaporate, is a broader issue of the intergovernmental fiscal system.
Minister, it is expected that any normal ratepayer has an obligation to service their municipal accounts. Apart from the reason you told us with regard to the billing problem, are there any other common reasons why these accounts have not been paid by your department? It is safe to say, Minister, that it is common cause that your department should pay what is due to municipalities. Thank you.
Chairperson, yes, obviously, the billing system is only one of several reasons, and amongst them is the fact that municipalities don't necessarily have the financial management skills to secure the revenue that is due to them.
Secondly, there are a large number of indigents who simply cannot pay, and with the post-2008 global economic crisis and its effects on our shores, some one million or more people have lost their jobs. That too means that the pressures on municipalities have increased. Thirdly, there is a flow of migrants, both within the country to certain municipalities that are urban and seem to have better prospects for jobs, and also from outside our country, understandably, from Southern Africa and elsewhere. All of these pressures mean that there are large numbers of people who are in these municipalities who cannot afford to pay the debt owed to the municipalities.
I must also point out that businesses owe a significant amount of this debt. Really, it's unpardonable that you should have a business and not pay your basic service charges and your rates and the like.
In short, there is a wide range of reasons and as we improve the system of co-operative governance, improve the model of local government that we are seeking to improve, and improve our financial management skills at the level of local government, we will be in a better position to address this debt problem. However, it is a huge problem. It is going to be on our agenda for a while, but we can certainly reduce the debt.
The Deputy Minister is correct in saying that this item has been on our agenda every year since 1994-95. It is ridiculous.
I want to restrict my question to the government debt. It is true that billing problems do constitute one of the reasons, but one of the reasons why this debt is not paid by government is simply because the accounting officers are failing to do their job.
You will recall that in Gauteng two years ago there was a court case where the court held that if the MEC did not ensure a payment was made to the municipality promptly by the following week, the MEC would go to jail. That is how angry the litigants were in that case.
Two years ago, I put a question in this House about whether any accounting officers had ever been sanctioned for failure to fulfil their obligation to pay their debts. The answer then was no.
Now I ask if it is not time that somebody takes a harder line with those who are responsible for paying the debts and who fail to do so.
Chairperson, yes, I agree that the accounting officers of the relevant government departments should be held to account, but so should the politicians.
One good example I think provinces should emulate is this. In one province, in every second cabinet meeting a standard item on the agenda is the debt owed by the provincial departments to municipalities. It is high up on the agenda. The Premier expects the MECs to answer for the outstanding debt. That was certainly happening in one of the provincial cabinets. Whether it is happening now I am not sure. Something that Mr Smith has said makes us think that maybe we should engage through the relevant intergovernmental relations structures to seek to ensure this happens at the level of all the provincial cabinets.
We are taking a report to the national Cabinet in due course. The national Cabinet may also consider putting this issue on the agenda, maybe once a month, to see to it that national departments are paying the service, rates and other charges that they owe to municipalities.
As for accounting officers, I cannot speak here. I certainly don't have any mandate from my Minister or my department. However, it would seem reasonable to me that the Public Finance Management Act, PFMA - I see the Deputy Minister of Finance here - might provide for such a thing. I actually think that we should engage with Treasury around this, and I don't see in principle what is wrong with what Mr Smith is saying. However, when we get around to doing this and implementing it, we will, needless to say, never acknowledge that it was Mr Smith who first proposed the idea to us. However, he can rest assured that if it happens, he can go to sleep better at night. Thank you.
Hon Deputy Minister, during our oversight visit to the provinces it was blatantly evident what causes the nondelivery of services - the debts not being paid by government departments.
Is the Deputy Minister's department willing to publish a monthly report so that we can see how this debt is being reduced on a month-to-month basis?
HON MEMBERS: Hear, hear!
Chairperson, firstly, we should have some sense of perspective. It is 4% of the debt that government departments owe, but it is bad enough, I agree.
Secondly, can we do what you are asking? I will raise that with my Minister. In principle, some form of public statement in this regard at regular intervals seems to me to be reasonable at this stage. I will confer with the Minister and the other relevant Ministers and the department officials, who no doubt are taking notes while they are seated there, though I don't see them with any pens, but hopefully they are registering everything and we will follow up on it. Thank you.
Departmental assistance to schools for children with special needs 87. Ms M F Tlake (ANC) asked the Minister of Women, Children and People with Disabilities:
Whether her department will assist schools for children with special needs, like Vukuzenzele Special School, to ensure that the needs of children in such schools are provided for; if not, what is the position in this regard; if so, what are the relevant details?