Hon Chair, we have heard Minister Gordhan saying all the right things, but the widespread and growing number of service delivery protests, which in many instances have turned violent, sound an alarm that cannot be ignored. According to a report by the Public Protector dating as far back as 2009, perceptions of corruption and maladministration have led to public discontent and a lack of confidence in the government's ability to deliver. Among the factors identified by the Public Protector were community dissatisfaction with poor service delivery, financial mismanagement, and allegations of fraud and corruption, coupled with complaints of poor communication with communities.
And nothing has changed! If anything, it has become worse! Deputy Minister Nel, I am sorry, but South Africa's municipalities are in crisis. It will require more than platitudes and a continuation of the same old tried and failed tactics and techniques to build the future our citizens need and desire.
Municipalities in South Africa face widespread capacity shortages. The majority are in a financially precarious situation, faced with limited, underutilised and diminishing revenue potential. It is undeniable that expertise is lacking, that cost recovery is insufficient, and that financial management remains inadequate.
Municipalities require sustainable revenue streams in order to remain financially and operationally viable. Their ability to generate such revenue, however, is essentially limited to payments for services provided - for example, water, electricity and sanitation - and to property taxes or rates.
What is clear is that many municipalities - including the largest metropolitan municipalities such as the City of Johannesburg, hon Masondo - experience difficulties in collecting their revenue.
The root causes of this poor collection can be traced to the following causes: inadequate and improperly implemented financial policies, including rates by-laws and policies, and credit control policies; failing billing systems, and I will talk more about that in a second; the deployment of incompetent or unqualified personnel to senior management positions, especially financial management positions; growing indigent populations; an ongoing culture of not paying for services on the part of local communities; and systemic losses of water and electricity through theft and inadequate maintenance.
Just yesterday I was informed that Lephalale Local Municipality in Limpopo is conducting mass disconnections of residents who have failed to pay their accounts in full. The really tragic part of this story, however, is the reason for the disconnections. Lephalale has not sent out municipal accounts since February this year and residents had to guess how much they were expected to pay. The disconnections may therefore be illegal, and are certainly unfair in the extreme. Another example is that Mantsopa Local Municipality in the Free State has not sent out municipal bills for six months!
We are pleased to note that the compliance of municipalities with the Local Government: Municipal Property Rates Act is being verified. It is a long- standing concern of ours that many municipalities either fail to gazette or improperly gazette their annual rates and tariff increases. In addition, the rates policies and the enacting by-laws that they do gazette leave much to be desired. This has the potential to bankrupt a municipality if it is legally challenged and found wanting, as the municipality will effectively be unable to collect rates at all!
Operation Clean Audit, the flagship programme for addressing the challenges in local government at the start of the previous term, has failed spectacularly. Of the two targets - there were just two targets - neither has been achieved. The first target that was set was that by 2011 no municipality should fall into the categories of adverse opinion, disclaimer or failure to submit. Well, we missed that one completely. While the number of such municipalities declined in the 2011-12 financial year, 98 of 278 municipalities still failed in this regard.
The other target set was that all municipalities in South Africa would receive an unqualified audit for the 2013-14 financial year. That was unlikely, especially given the current state of municipal finances and administration. In fact, just last week I revealed that according to the latest audit reports, every single municipality in the North West is technically insolvent - bankrupt! [Interjections.] Or how about the Free State municipalities that collectively owe Eskom more than R1 billion rands, and that at least three of them face being cut off unless a payment is made?
The cause of this debt is once again a failure to properly collect revenues owed to the municipalities. Minister, a much tighter system of monitoring and evaluation of the ability and performance of municipalities is required to ensure that they are effectively collecting the revenue that is owed to them, and then spending it appropriately.
We urge you to implement strict reporting tools and to intervene rapidly where misconduct, mismanagement or poor performance are indicated. It is an indictment of the ANC government in all three spheres that so many once viable municipalities are now collapsing around our ears.
Most municipalities suffer from major infrastructure maintenance issues. In the Fourth Parliament I highlighted the problems experienced by Makana Local Municipality in the Eastern Cape, where the citizens, students and residents of Grahamstown had been without water for weeks on end. And the cause of that? The lack of maintenance of existing infrastructure. The municipality had failed to adequately look after the pumps and fittings that carry water from the storage dams to the treatment plants.
Makana Local Municipality is by no means unique. I could equally refer to Tswaing Local Municipality in the North West, or Magareng Local Municipality in the Northern Cape, or any number of other municipalities.
Hon Mthembu, the Municipal Infrastructure Support Agent is a step in the right direction, but the crisis is enormous, and the interventions that are being undertaken and the assistance that is being offered are just a drop in the ocean.
The DA calls on the Department of Co-operative Governance and Traditional Affairs to undertake a comprehensive assessment of the state of municipal infrastructure and to provide regulatory guidelines for expenditure on infrastructure maintenance.
The national transfer grants intended to address these issues are swallowed up in new developments, or utilised to fund operational expenditure, just to keep the municipalities afloat financially. In this regard, the DA urges Minister Gordhan to tighten up the controls placed on the use of conditional grants - to reward those municipalities that use them effectively, and to penalise those that don't.
Minister, it is high time that we had a comprehensive review of the financing of local government and that we critically examine how sustainable the current model is. Deputy Minister Nel quoted former United States Speaker, Tip O'Neill, as saying, "All politics is local." Nowhere is that more true than here in South Africa. It can be argued that the overpoliticisation of local government is a primary cause of the crisis experienced in municipalities across our country on a daily basis.
The deployment of ANC cadres, comrades and cronies to take charge of departments, towns and cities has resulted in the catastrophic failure of infrastructure, the nondelivery of services and maladministration of the worst kind. [Interjections.]
Zwelinzima Vavi rightly described the ANC as the organisation of "Absolutely No Consequences"! When forensic reports in metropolitan municipalities gather dust while the municipal officials and public representatives fingered in those reports are either promoted to higher office or suspended on full pay for years before returning to work with no ill effect, it is easy to see the truth in his allegation.
Minister, I refer here to the Kabuso Report in Nelson Mandela Bay Metropolitan Municipality, the Manase Report in eThekwini Metropolitan Municipality and the Ernst & Young Report in Buffalo City Metropolitan Municipality, all of which assert serious wrongdoing and misconduct. In fact, I can point out a few members of this House who are named and shamed in those very reports. [Interjections.] Deputy Minister Bapela, you said that local government is everybody's business, and that might well be part of the problem! If you do nothing else in your term of office, get rid of the fat cats that are feeding at the trough of local government. [Applause.] I refer here to the many underqualified, overpaid and underperforming municipal managers and directors.