POLITICS

R22.2bn owed to Gauteng municipalities - Mike Moriarty

DA MPL says Ekurhuleni owed R7.2bn, Joburg R8.5bn, Tshwane R2.8bn but Midvaal only R55m

R22.2 billon owed to various Gauteng municipalities must be collected urgently

According to the Provincial Gazette Extraordinary of 27 June 2011, R22.2 billion, which is about 30 % of all annual income due to Gauteng municipalities, has not been received for over three months. This debt is getting older and older which shows the inability of municipalities to manage their finances.

There is a huge risk of municipalities going into overdrafts and even defaulting on loans taken out to pay for capital infrastructure. The cost of obtaining loans will get even more expensive when interest rates rise, and services are likely to get worse before they get better.

The solution to the problem is that managers should ensure that their staff do the jobs the public pay them for and if they can't or won't, they should be fired. If the private sector can get it right why can't government?

76% of the problem is created by the metros:

  • Ekurhuleni failed to collect R7.2 billion or 36,3% of its total annual income.
  • Johannesburg failed to collect R8.4billon or 29,5% of its total income
  • Tshwane failed to collect R2.8bn or 17,3% of its total income

The failure of the metros should be contrasted with the situation in the DA run Midvaal local council where a mere R55million (not billion) is owed, which represents just 9% of total annual income. This proves that where the DA governs it governs well.

Statement issued by Mike Moriarty, DA MPL, July 28 2011

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