EFF statement on the Division of Revenue Bill and economic measures in times of coronavirus

18 March 2020

Today, the EFF objected to the Division of Revenue Bill in the last sitting of the National Assembly as Parliament suspends its business following measures announced by President Cyril Ramaphosa to combat COVID-19 pandemic. The Division of Revenue Bill is a bill of Parliament which divides money raised nationally through taxes and royalties between spheres of government i.e. national, provincial and local government. We objected against the allocation of resources in a manner that reinforces apartheid spatial planning and perpetuates the collapse of municipalities in the face of pandemic.

Majority of municipalities in local government are on the brink of collapse or have completely collapsed, unable to provide basic services and owe Eskom and the water boards lots of money without capacity to collect revenue of their own. We have raised our concern since the 5th Parliament that the bill in its current form and its assumptions do nothing but reinforce apartheid spatial planning and perpetuate collapse of municipalities. Two main assumptions in the bill is that municipalities have administrative capacity to collect revenue and there is revenue, which is not the case.

We objected to the lack of state capacity in local government, lack of water and sanitation infrastructure, unsustainable debts amounts to Eskom and waterboards, and continued dilapidation of general infrastructure. Only municipalities such as metros and few local municipalities in white-owned areas are able to collect enough revenue to deliver services to residents, while majority of municipalities barely afford salaries.

We call on government to prioritise the allocation of resources to local govemment to build state capacity and localise the economy. We call on government to do away with the austerity budget tabled by the Minister of Finance and encourage spending that will stimulate local economies, put money in the pockets of workers, small and informal businesses. We further call on government to employ as many people as possible and abolish tenders, pay workers decent wages with benefits and build state capacity to deliver services to all our people.

The bill we objected to today in the National Assembly fails to take these realities into consideration despite our pleas during deliberations in the Standing Committee of Finance, and previous debates in Parliament. In the face of the pandemic, the bill is irrelevant and does not take into account the new realities, and measures needed to curb the COVID-19 pandemic. More money should be allocated to municipalities to provide water and sanitation infrastructure instead of the budget cuts announced embedded in the bill.

Govemment must engage business, in particular the financial sector, to put in place much needed immediate financial measures in place to assist workers as we implement measures to combat COVID-19:

1. All banks must suspend payment of home loans for 4 months, and restructure home loan term of payment. All home loans payment that were made on the 15th and ones scheduled for the 25th of March should be reversed.

2. All banks must suspend repayment of personal loans, credit cards and overdrafts for a period of 4 months.

3. All banks must suspend repayment of car loans for 4 months.

4. Government must pay all workers who earn below R15 000 once off allocation grant of

R3 500 food and hygiene essentials.

5. Lastly, all service providers such as Multichoice, Vodacom, MTN and others should suspend debit orders for 4 months.

To implement these measures, govemment should immediately engage the Public Investment Corporations (PIC), Compensation Fund and the I-JIF to look at surpluses that can be used to inject cash into companies to meet them halfway to allow them to continue to pay salaries and pay for unavoidable liabilities that cannot be suspended.

The South African Reserve Bank should announce a deep interest rate cut to play a far much active role in the economy to bring relief and also inject cash into the economy.

Government must also pay all small businesses that employ between 1 and 50 people on a fulltime basis cash support from govemment to ensure that they do not retrench workers.

Municipalities should extend the payment period and allow both businesses and households to pay the minimum amount from 50% of the bill and above without cutting off water and electricity services.

Lastly, government should immediately establish a database of all leaners from quantiles schools that qualify for nutrition feeding schemes, and initiate a feeding scheme programme for learners while they are at home, and deliver meals on a daily basis in a responsible manner without risking infections.

Issued by Vuyani Pambo, National Spokesperson, EFF, 18 March 2020