Whether he will increase the allocation of funds from the Division of Revenue to municipalities to equal that of provinces and the national government so that they will be able to appoint qualified officials and deliver services, details furnished, if not, why not; if so, what are the relevant details?
The answer is: The allocation of funds between national, provincial and local government in the Division of Revenue, which we have just
gone through, is informed primarily by the functions performed by each sphere of government.
The national and provincial spheres receive larger allocations because they deliver more costly functions, and unlike municipalities they do not collect significant revenues that offset the costs of their services.
National government services include, for example, policing, defence, social security and higher education which is now free for students from low-income houses. Provinces spend the majority of their budgets on providing health care and basic education, which is also free to most learners. On the other hand, the largest services provided by municipalities are electricity reticulation, water, sanitation, and refuse removal.
All of these are services that all business and nonpoor households should be paying for. This is part of the reason I always emphasise the importance of all of us to pay for services we use.
In addition, municipalities also collect property rates, which is an important wealth tax paid by property owners, which amounts to over
R60 billion per year and is retained by municipalities and not shared with national government.
It is within that context that calls for greater allocation to municipalities against provincial and national government might not be well thought through. Thank you very much. [Applause.]