No political will to collect R93.4 Billion in debt owed to Municipalities
09 September 2014
The Democratic Alliance (DA) notes with extreme concern the rising consumer and government debt owed to Municipalities countrywide. We request that the Minister of Cooperative Governance and Traditional Affairs, Pravin Gordhan, present before Committee a turnaround strategy to address the skyrocketing of debt owed to Municipalities.
In a report delivered by the Department of Cooperative Governance and Traditional Affairs (COGTA) to the Portfolio Committee on COGTA today, it has revealed that in the quarter ended March 2014, Municipalities were owed R93.4 billion for municipal services as compared to R84.2 billion for the same period last year.
Municipalities are systematically failing to collect the revenue they need to keep services going.
Government's share of the outstanding debt is at R4.1 billion; Minister Gordhan, would do well to liaise with the various government departments to accelerate the payments that need to be made within a 30 day period.
R73.7 billion of the R93.4 billion in debt is over 90 days old. This is of serious concern, as it is doubtful whether municipalities will be able to recoup all of this debt.
The largest component of this debt relates to households that haven't paid their bills, which accounts for 61.5% or R57.5 billion of the debt. Businesses account for for 20.7% or R19.3 billion and other category of debtors for 13.4% or R12.5 billion.
Gauteng has the highest recorded debt owed to the tune of R40.9 billion, followed by KwaZulu-Natal with a recorded debt of R10.4 billion.
This indicates that municipal consumer debtors are increasing while the anticipated collections do not materialise. Households are unable to pay for municipal services and a lack of political will exists to collect this debt.
It is high time that the Minister intervenes and reviews municipal strategies with regard to debt collection as we cannot allow critical services such as the provision of clean drinking water, sanitation, electricity, refuse removal and other basic services, to be compromised.
We urge all South Africans to pay their municipal accounts that are in arrears as we should all unite to tackle this ongoing debt burden. We must work together to ensure the continued viability of our municipal finances.
Statement issued by Kevin Mileham MP, DA Shadow Minister of Cooperative Governance and Traditional Affairs, September 9 2014
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