Treasury should not punish poor households for the sins of dysfunctional municipalities

18 May 2023

With the rising cost of living and soaring unemployment, poor households that rely on free basic electricity and water are under threat to immediately be cut out from accessing basic services.

This is if The Municipal Debt Relief plan is passed that implies that impoverished households are required to relinquish their constitutional entitlements to essential services, such as water and electricity, to bail out dysfunctional municipalities and fill the gapping financial hole in Eskom.

The DA is calling on National Treasury to commission an independent socio-economic impact assessment on its proposed plan to ring-fence municipal grants meant for indigent households for use in the payment of debt by dysfunctional municipalities.

As part of its efforts to recoup the R56 billion debt that municipalities owe to Eskom, Treasury came up with the Municipal Debt Relief plan to write off this debt if the affected municipalities complied with a list of requirements. One of these requirements is that indebted municipalities should earmark a component of the Local Government Equitable Share (LGES) that municipalities use to provide free basic electricity, water and sanitation - and use it to pay off their Eskom debt.

It is deeply concerning that Treasury took this momentous decision without considering the ramifications that it will have on poor households, some of whom struggle to put food on the table. The question that Treasury should answer is why punish the poor over gross mismanagement that took place in the corrupt administrations of dysfunctional municipalities. It is morally wrong to take away the water and electricity supply of poor indigent households over the actions of dysfunctional municipalities.

An independent socio-economic impact assessment will not only open an avenue for the indigent to share their views on the proposal by Treasury and the impact that it will have on their livelihoods, it will also test the legality of infringing on the socio-economic rights of the poor.

Some municipalities were already raiding the equitable share meant to provide free basic services to indigent families and Treasury appears intent on completing this unethical raid on these social protection funds. Treasury must institute an independent socio-economic impact assessment on its proposal before it goes ahead and implements its Municipal Debt Relief plan.

Issued by Eleanore Bouw-Spies, DA Shadow Minister of Cooperative Governance and Traditional Affairs (CoGTA), 18 May 2023