National Treasury joins Western Cape ‘Whatsapp group’ – Confirms support for devolution of powers to capable provincial and local governments

29 November 2023

In National Treasury’s response to the Western Cape’s recommendations for amendments by the NCOP to the Division of Revenue Amendment Bill, National Treasury expressed their support for the devolution of rail, housing and bus services to capable provincial and local governments.

According to the response to the recommendation of the Western Cape Budget Committee that fiscal decentralisation be encouraged by National Treasury to empower provinces and municipalities for more effective service delivery, the National Treasury responded:

“The recommendation is noted. The National Treasury is on record supporting the devolution of rail, housing, and bus services functions in a responsible and sustainable manner where capacity constraints are considered. We believe that where possible, local governments should have greater fiscal control to better manage the resources available to them and enhance their ability to provide essential services.”

Further, in response to the recommendation of the Western Cape Budget Committee that National Treasury embraces subsidiarity and allocative efficiency principles by devolving certain powers to capable provinces and metros, fostering greater operational efficiency not currently forecasted in the Division of Revenue Amendment Bill 2023, the National Treasury responded:

“We acknowledge the potential benefits of devolving certain powers to provinces and metros to achieve efficiency and improve service delivery. We will collaborate with relevant stakeholders to identify areas where this approach could be effective. For instance, we are exploring the devolution of certain provincial bus routes to the City of Cape Town. However, we will proceed cautiously to avoid any potential pitfalls along the way.”

This is a clear indication that the tough fiscal realities of this national budget could have been better managed had capable governments like the Western Cape Government been given additional power, and subsequent funding, over certain core functions of government.

The DA in the Western Cape has for a number of years called for the devolution of certain powers from National Government, including policing, public transport, energy, trade, and harbours.

It is good to see that National Treasury has joined the Western Cape ‘Whatsapp group’, and I hope that they are able to help make the case for devolution to their colleagues in the National Government. Given the Western Cape Government’s track record of good governance and service delivery, devolution would undoubtedly lead to improved service delivery for our residents in areas where National Government have failed.

Issued by Deidre Baartman, DA Western Cape Spokesperson on Budget, 29 November 2023