Scopa Chairperson Songezo Zibi said it was about time the National Treasury told municipalities to shape up, as they did not think there would be consequences.
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Standing Committee on Public Accounts (Scopa) Chairperson Songezo Zibi and the Cooperative Governance and Traditional Affairs (CoGTA) Portfolio Committee are backing the National Treasury for withholding R13.5 billion in equitable share transfers to 69 municipalities.
The transfers were withheld to instill fiscal discipline and ensure that public money is properly managed, that unauthorised, irregular, fruitless, and wasteful expenditure (UIFWE) is addressed, among other things, amid assurances of no impact on the delivery of services.
Zibi welcomed the step taken by the National Treasury.
“If anything, the National Treasury has taken too long to act against these municipalities. They need to get their house in order,” he said.
The Rise Mzansi leader said it was about time the National Treasury told municipalities to shape up, as they did not think there would be consequences.
“You can't ask taxpayers to keep giving you money that you then waste, and it goes to corruption and so on and so on. I agree with the step that Treasury has taken.”
He further said that in the oversight work by Scopa and the CoGTA Portfolio Committee, they found rogue municipalities that terribly mismanaged and wasted money a lot of the time.
“They don't do what they are supposed to do to collect their own revenue. We dealt with municipalities that have failed to collect revenue from large companies for years, running into hundreds of millions,” he said.
Zweli Mkhize, chairperson of the CoGTA Portfolio Committee, said the National Treasury’s decision confirmed the seriousness of the financial management and governance challenges highlighted during their joint oversight engagements with Scopa.
“All municipalities must realise that things cannot continue as usual when governance and financial prescripts are undermined,” he said.
Salga stated that any withholding of equitable share transfers must balance compliance objectives with the impact on service delivery and municipal financial sustainability.
It said there was a difference between genuine governance failures and deeper structural challenges.
“While non-compliance cannot be condoned, many municipalities face severe fiscal and economic pressures that weaken financial sustainability and service delivery. These realities must be addressed to resolve recurring financial distress,” Salga said.
While taking a swipe at municipalities that failed to pay their creditors, including paying over pension fund contributions, UIF and PAYE deductions from municipal workers’ salaries, Salga committed to working with the National Treasury, the Auditor-General, the CoGTA Department, provincial governments, and municipalities to implement immediate corrective measures and long-term structural reforms.
However, Samwu General Secretary Dumisane Magagula said the effect of withholding the funds will push the already struggling municipalities closer to collapse.
Magagula said it was untrue that the National Treasury’s action would not impact the provision of services, as it was not a corrective intervention but rather a recipe for deepening the municipal financial crisis.
“Furthermore, municipalities cannot pay workers’ salaries, honour pension and medical aid contributions, settle third-party deductions, or meet obligations to service providers if the very funds intended for these functions are frozen.
“The inevitable consequence of this decision is that municipal workers will once again face severe uncertainty over their salaries, while communities bear the burden of deteriorating public services,” he said.
MK Party spokesperson Sifiso Mahlangu said accountability must target the people who are responsible, not the residents who will suffer the consequences.
The EFF said the solution was not to withhold monies that must deliver services to the people. “Municipalities have failed our people, and now the National Treasury is doing the same thing.”
Cosatu parliamentary coordinator Matthew Parks said the labour federation appreciated the need to install financial discipline in errant municipalities, but was extremely worried about the unintended potential consequences of withholding the funds.
“Withholding conditional grants is only a punitive tool and does not resolve the systemic fault lines that have brought many municipalities into severe financial difficulties,” he said, before calling for a comprehensive package of interventions.
Meanwhile, Build One South Africa (Bosa) mayoral candidate Nobuntu Hlazo-Webster demanded that the City of Johannesburg, which has had its R3.6 billion withheld, release a report detailing the accountability measures taken against officials and political office-bearers responsible for UIFWE.
“Johannesburg's residents deserve to know who has been held accountable, what disciplinary or legal action has been taken, and what steps are being implemented to prevent these failures from recurring,” Hlazo-Webster said.