In what has been correctly described as the second phase of the radical economic transformation, the ANC views the Division of Revenue Bill as a strategic opportunity to finance our policies while taking stock of both global and domestic considerations.
The measurable objectives of the Division of Revenue Bill are to promote economic growth, social development and poverty reduction through the effective, efficient and appropriate allocation of public funds.
The Division of Revenue Bill is a financial instrument to ensure that policy programmes are brought into effect through the provisioning of the necessary financial resources across the three spheres of government. This is intended to foster transparency and ensure smooth intergovernmental relations.
Local government is an important sphere of government when it comes to the delivery of basic services that directly affect communities. Services such as clean drinking water, electricity, shelter, waste removal and roads are basic human rights, and they are essential components of the right to dignity, as enshrined in our Constitution and the Bill of Rights.
The 2015 budget maintains the baseline allocation for the local government equitable share, improving access to basic services is a central policy priority, and the local government equitable share formula is structured to ensure that the cost of providing free basic services to indigent households is updated to account for above-inflation increases in the cost of electricity and bulk water supply.
The allocations to basic services provided by municipalities have been prioritised, despite the constraints of the budget framework. A new approach is proposed for cities to support growth and restructuring and to strengthen infrastructure investment. Over the longer term, progress in municipalities requires local economic growth, property development and revenue capacity, alongside national support. These are some of the key elements in the Back to Basics municipal development strategy.
National allocations to municipalities continue to be equitably allocated and aligned to the Back to Basics strategy. We are pleased to note that the local government equitable share was protected from baseline reductions to ensure that service delivery to the poor is prioritised. Allocations for water, sanitation and electricity in rural municipalities have been increased substantially. About R4,3 billion will be spent over the next three years to build capacity and strengthen systems for financial management and infrastructure delivery.
The ANC recognises that urgent action must be taken to make local government deliver more efficiently on basic services, including water and sanitation, electricity, human settlements and roads. In his state of the nation address, His Excellency President Zuma presented the nine-point plan to boost the economy, which includes the creation of townships and rural enterprises and the building of water, sanitation and transport infrastructure.
In line with the Medium-Term Strategic Framework and the National Development Plan, the 2015 budget prioritises spending on economic infrastructure such as roads and transport, electricity, water and sanitation.
The collaborative review of local government infrastructure grants will give special attention to the maintenance of infrastructure. National departments of government must provide infrastructure support to local government through transfers, primarily the municipal infrastructure grants. The Minister of Finance, hon Nene, announced a R46,9 billion allocation to the grant over the next three years.
Over the next three years, slower growth in conditional grants and above- inflation increases in bulk water and electricity costs will mean that municipalities will have to reduce spending on noncore items and review their focus on delivering basic services.
Government is aiming to build 1,5 million houses by 2019 and has allocated R33,3 billion to metropolitan cities over the next three years.
Ndzi lava ku bulanyana na n'wina hi timhaka leti humelelaka haleno Palemende. Inkomu. [Nkarhi wu herile.] [Va phokotela.] [I would like to have a small talk with you about issues that are happening here in Parliament. I thank you. [Time expired.] [Applause.]]