DA to propose amendments to North West municipal budgets to offer financial relief to residents affected by Covid-19 lockdown

13 May 2020

Note to Editors: Kindly find video clips in English and Afrikaans by DA North West Provincial Leader, Joe McGluwa.

The DA’s North West Provincial Management, together with the DA’s National Shadow Minister of Cooperative and Traditional Affairs (GOGTA), Haniff Hoosen MP, and Freddy Sonakile MPL, the Shadow MEC for COGTAHS in North West, last week convened an urgent meeting to discuss the role of DA Councillors and the participation of DA Municipal Caucuses in the budget adoption process of municipalities on the municipal budgets for the 2020/21 financial year starting on 01 July 2020.

A critical time lies ahead. The budgets before municipal Councils were funded through allocations under the National Budget tabled in February this year, when things were still normal before the Covid-19 pandemic and the subsequent lockdown.

The funding streams for these budgets come from the Equitable Share, Conditional Grants, and Municipal Own Revenue projections.

However, the economic impact of the lockdown on the fiscus will be severe. National Treasury has already indicated that it projects a loss of revenue to the fiscus of R285 billion.

The National Minister of Finance is expected to table an adjustment budget soon and this will impact on the budgets currently before municipal councils.

North West Municipalities are already in either a state of financial distress or collapse. Downward adjustments to municipal budgets, specifically with regards to the Equitable Share and Conditional Grants will severely impact service delivery.

National Treasury also estimated that between 3 to 7 million people will lose their jobs as a result of the economic fallout from the Covid-19 lockdown. As a result of mass scale job losses, and the closure of small businesses, many North West families will be unable to meet their obligations with regards to the payment of municipal rates, taxes and water and electricity bills. This will have a direct negative impact on the own revenue generation of municipalities.

In response to the socio-economic impact of the Covid-19 lockdown, the DA Provincial Leadership will hold various meetings with its municipal caucuses discussing proposed amendments to municipal budgets to ensure that municipalities continue to meet its constitutional obligations on basic service delivery, but also to ensure that budgets are responsive to the socio-economic needs of residents.

Some of the amendments to be proposed in order to redirect funding towards a sustainable relief package for residents affected by the economic crisis include:

All funding for non-core municipal programmes such as mayoral legacy/prestige programmes, event sponsorships and catering should be cancelled;

All budgeted salary increases for public representatives and municipal officials should be suspended;

Any funding for the purchase of official vehicles for political office bearers such as Executive Mayors/MMCs/Speakers as well as for the personal use of Municipal Managers and Directors should be cancelled.

The only vehicle purchases to be considered should be for the support of service delivery, such as refuse collection trucks, tractors, EMS, Fire, Sanitation, Water tankers and only if absolutely required;

All funding for extensive international travel for public office bearers and officials should be cancelled;

A freeze on the recruitment for vacant non-critical posts.

In addition to the above budget amendments, the DA will also propose for Councils to resolve that:

Households and individuals that can provide evidence that they have suffered loss of employment/income should not be penalised for failure to pay rates, taxes and utilities. Accounts in arrears as a result of economic hardship due to the lockdown should not incur any interest or penalties;

Affordable payment arrangements should be considered for those experiencing reduced income, while those who have lost all income, should register for subsidised services/indigency;

Debt collecting and disconnection of electricity/water supply be suspended for a reasonable period.

Our DA Councillors will also motivate for stringent operational cost cutting measures across all municipal functions such as reduced consumption with regards to printing/advertising/marketing/branded goods/gifts etc.

In short, we will do everything that we can in Council to ensure that core service delivery programmes like refuse collection, water supply, electricity, sanitation, roads maintenance and all other core municipal service delivery functions continue, while offering relief to households who struggle financially.

Issued by Joe McGluwa,DA North West Provincial Leader, 13 May 2020