Madam Chair, the 2007 Division of Revenue Bill provides for the equitable division of nationally-raised revenue between the three spheres of government. This year the amount to be shared between national, provincial and local governments amounts to R480 billion. In the 2007-08 financial year, a total amount of R202 billion consisting of the equitable share and conditional grants will be transferred to the nine provinces to meet their expenditure responsibilities. Local government will receive R34 billion in this financial year to improve their delivery of basic services such as water, sanitation, roads and infrastructure.
The Minister has indicated that the National Treasury has not accepted certain Financial and Fiscal Commission recommendations about conditional grants to provincial and local government. For instance, the FFC wanted the Land Care Grant and the Comprehensive Agricultural Support Grant to be placed together to lessen the administrative workload for the provinces, but Treasury disagreed. Other grants that were the subject of disagreement included the Municipal Infrastructure Grant and the National Human Settlement Grant.
The IFP accepts that, from time to time, there will be disagreements between the FFC and the government. But, considering the vital role played by this institution, the FFC, we have to raise concern that it could be sidelined if care is not taken.
Faster than expected, national economic growth in the last few years and better tax collection have meant that the Minister of Finance is in the fortunate position of having a larger revenue cake to slice up between the three spheres of government. However, the availability of money to allocate is no longer the main problem. The main problem now is the ability of provincial and local governments to spend their allocations for the provision of basic services, infrastructure and other essential functions.
Over the past few weeks Parliament has heard that the third quarter spending in the 2006-07 financial year by provincial departments is lagging behind target. For instance, provincial departments of public works and transport had spent 63% of their allocations by the end of the third quarter.
Even more worrying is the fact that local governments are even worse off in terms of their ability to spend the allocated grants. For instance, municipalities were able to spend only 46% of total municipal infrastructure grants in the first three quarters of the current financial year. In total, some 106 municipalities or about one-third have been classified as underspenders. Therefore, the IFP welcomes the actions of the Department of Provincial and Local Government to delay payments to municipalities that are unable to spend their allocations. Even more so, the IFP applauds the fact that such allocations may, in fact, be cancelled and diverted to local governments that have the ability to spend it.
The IFP supports the Division of Revenue Bill. But, we stress that allocating money is one thing, efficiently spending it on projects that address the needs of the poorest communities is a completely different animal. We need more interventions from the relevant authorities to ensure that spending is stepped up and we need closer monitoring to ensure that allocations are in fact translated into basic services, improved infrastructure and other improvements in people's daily lives. The IFP supports the Budget. Thank you. [Applause.]