Municipalities wasted R27bn - report

2011-09-15 09:19

Cape Town - Municipalities could have saved R27bn in the previous financial year - that is R74m per day - by cutting down on unnecessary expenses.

Finance Minister Pravin Gordhan said on Wednesday at the launch of the Treasury’s latest financial municipal oversight report that new council members had to “forget about fancy extras like brand new Mercedes-Benzes”.

The oversight report for the 2009/10 financial year listed a range of items which municipalities had to cut down on, including “excessive” benefits, like expensive cars, cellphone allowances, sponsorships, catering, work sessions, luxurious offices, overseas trips and consultants. In this way up to 15% of their costs could be reduced.

“Cut down on non-essentials and get your planning, budgets, service delivery and bureaucracy right,” said Gordhan at an information session at Parliament.

He believed some “progress” had been made, but cautioned municipalities to rather spend their budgets on necessary infrastructure development and maintenance.

Break in trust

Although the report showed that more people had gained access to essential services during the last three financial years, the break in trust between residents and local government was identified as the “biggest obstacle”.

Up to 111 service delivery protests were reported last year (the most since 2004) and there was an increase in the number of “militant” taxpayers' associations, which held back payments due to disputes with municipalities.

According to the report, the financial affairs of municipalities still looked bad, in part because of faulty service accounts, but also because too little was charged for services and because of an inability to collect debt. Outstanding debt was R62.3bin in December – an increase of 10% compared to 2009.

There was still too little being spent on maintenance and repairs to electricity distribution networks, water infrastructure and roads. The national backlog regarding water infrastructure was R13bn.

The report warned that this neglect would in the medium term lead to unreliable services, higher maintenance costs, transmission losses, lower income and finally raised tariffs for taxpayers.

“Several rural municipalities don’t know what assets they have, where they are or how old they are.”


In addition there was a shortage of critically essential technical skills like those of qualified drivers, engineers and technicians.

Statistics also showed municipalities and metro councils were employing fewer staff in critically important sectors like financial and technical departments and more in “other” departments. By 2009, 11% of employees were tasked with financial administration, 23% were in technical sectors and 65% in “other” departments.

Although staff numbers increased by only 4% between 2006 and 2009, municipal salary accounts increased by up to 52%.

And while metro councils and smaller city municipal managers earned salaries appropriate to the experience and skills required by those posts, municipal managers at district councils were paid salaries that were “unreasonably high”, said the report.

  • sarecen - 2011-09-15 09:22

    So whats new?

      willieman - 2011-09-15 09:41

      Agree,it is called cadre deployment

      d2eguy - 2011-09-15 09:42

      what do you expect from natural born thieves .

      WhySoAngry? - 2011-09-15 09:49

      These financial reports should be published with the offending municipalities being named and shamed!

      Cynix - 2011-09-15 09:54

      Pravin, is this statement in national interest? - what a career ending speech. Do the people you communicate with ever look outside their metalclad racist BEE boxes - please alsocc Juliaas, Sicela (if you can find him) and the prez and get someone read it to them. I see the Youth leader Lungisa wants to fill all open jobs with young graduates - please tell him that what we have now is the result of mass deployment of incompetence. Then tell comrade Blade that post graduation training of graduates is more important than the certificate (if it's not forged).

      Servaas - 2011-09-15 10:00

      So?? We all know how useless the goverment and municipality is. Will the guilty be taken to task?? Nope, will get a promotion and a pat on the back. But go make your cross next to the ANC again. They are empowering you and giving you "Economic Freedom". LOL... Anyways, in other news.. Someone seen any "angry" bees lately?

      Azazel - 2011-09-15 10:03 i know why i still don't have a house or running water, almost 2 decades of waiting. My ANC, my failure, our extinction.....

      saabnut - 2011-09-15 10:10

      YAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAWN. So what- showerhead and his pillaging government is in charge. Do you REALLY expect anything different?

      Protest - 2011-09-15 10:12

      So whats new? ..... R27bn is enough money to ensure that every person able to work in South Africa can have a job. R27bn is enough money to ensure that our roads are maintained in 1st world standard. R27bn Is enough money to ridicule the nationalization argument. R27bn Is enough money to ridicule the fight for economic freedom. What is new is that the report of the R27bn comes from the government. What is new is that the population can demand accountability based on this oversight report. Malema, where is your press release concerning this ? ? ? ? ?

      Servaas - 2011-09-15 10:34

      I wonder how big a portion is sitting in Malema's trust??

      York Hunt - 2011-09-15 10:40

      And Zoomer had the cheek to say South African blacks are impoverished because of lack of opportunities? And that AA needs to be tightened? Thieving ANC scum!

      WillowI - 2011-09-15 11:03

      @Protest - what does this populist drivel mean : 'fight for economic freedom' ? From who ? From what ? What law in this country: States that you may not start your own business ? Forces you to hold the job you currently do? Says that you may not buy any farm on the open market ? States that you may not buy any house on the open market ? Does not allow you to buy any business ? The richest two men in SA today are a black and an indian man - so it can be done by anyone! This populist phrase 'economic freedom' must be stopped. Everyone else in the free world understands that in a capitalist democracy what you achieve depends entirely upon yourself. What you put in is what you get out.

      beicime - 2011-09-15 11:12

      When incompetence is appointed, one can't expect better. Africans are worst to tehmselves than imperialists.

      Protest - 2011-09-15 11:22

      @WillowI Did you bother to read my post? By attempting to stop This populist phrase 'economic freedom' you will fuel it. Expose Malema and this populist phrase 'economic freedom' he started, for the massive fraud it is. I agree with you that there are no obstacles in the South African law to prevent any-one from economic freedom. The 'fight for economic freedom' is one of the biggest con's in the history of the post apartheid South Africa. It is criminal to the point of treason. The con-artists should be exposed and held accountable.

      WillowI - 2011-09-15 11:43

      @Protest - exactly - I agree with both your posts - except for the statement that R27bn could be used to ridicule the 'fight for economic freedom' - because it is a lie. However that statement is used by the ANC/YL to drive their own agenda - so it needs to be refuted at every opportunity. In fact the laws in this country BEE / AA is an added advantage for those that want to create their own 'economic independence'. PS. I personally know a Cuban exchange doctor (a very skilled professional) that refuses to go back to his own country. In his own words "the biggest business you can own in Cuba is the corner shoe cleaner". Now that country (CUBA) is a place that needs 'a fight for economic freedom'. And we all know why.

      PB - 2011-09-15 12:39

      If people with the applicable experience, abilities and will to actually get the jobs done were appointed, no costly consultants, advisers or witchdoctors would be needed. It would be interesting to get an update about the state of Sannieshof (Tswaing) municipality since the DA took over. Pity that the ANC government still holds the purse strings for funds that the municipalities need to do their jobs with.

      Spyker May - 2011-09-15 12:45

      I will tell you what is new.., Zuma wants to 'tighten' Affirmative Action... R74m an hour, here we come... SA is going to make Zimbabwe look like Monte Carlo..!

  • Schalk - 2011-09-15 09:27

    Nice... That is 500000 RDP houses blown in one single year. Good stuff cadres. Enjoy your bling while it lasts. I just wish we could get these stats out to the masses...

      nitesh.khoosal - 2011-09-15 09:41

      @ Schalk, even if it did get to the masses, what difference wud it make, they just too f###en Stupid...

      The Wonderer - 2011-09-15 10:00

      My head spins when I think what we could have done for the masses with R27 BILLION! So the ANC's wasteful expenditure now stands at a staggering R40 BILLION and counting!!! At THIS pace the ANC's wasteful expenditure will reach R1 TRILLION within the next 10 years!!

      Mark Singh - 2011-09-15 10:26

      the masses dont really care. its cadre enrichment

      Kevin King - 2011-09-15 10:48

      @ Schalk: Seriously, lets come up with a way to get this info out. Maybe print posters to put up in the informal areas? "Your ANC wasted R27 Billion (R27000000000), you wont be getting your houses this year"

      IC1 - 2011-09-15 11:10

      Unfortunately the masses wont believe you, they will still say it's an apartheid lie

      Fred - 2011-09-15 11:22

      Agree with you schalk, we need a political party to go into the rural and poorer areas and discuss this with the people, the ANC are so arrogant they even tell the people that they're stealing of them, time somebody sat down with the people and explain that there are other options, its nonsense that they are to stupid to understand, its the opposition parties that are to lazy and incompetent to go and explain it to the people.

      Sharkie - 2011-09-15 11:29

      Yup - dons't help we read about something we know about..... But wow - R27 bill.......eosh gotta hand it to then, when they do it they do it proper! Guess thats the reason they need to over charge you R1000 at a time on water and lights huh?

      Sharkie - 2011-09-15 11:35

      Dear DA - the AG just handed you your next victory..... The ANC can try using fear tactics and handing mines over...... But at the end of the day - if you want toilets and running water and a house that R27 bill gonna look damn good.

      JM - 2011-09-15 12:35

      Where are all the Malema supporters? Your hero calls all whites criminals. What do you call this theft of R27 bn?

      Spyker May - 2011-09-15 13:22

      Good call King Kevin.., Before we rush off to Postnet though, just a thought - is it not the job of our favourite opposition party..? Or are they perhaps starting to enjoy the spoils of election victories as well..?

  • 1gascan - 2011-09-15 09:27

    Our taxes yest again being wasted! Why not put the money towards the poor and roads - then we wouldn't have to put up with these infernal toll gates!!!

      1gascan - 2011-09-15 09:34

      This is really REALLY sad! Just some quick maths to put it into perspective: 1. R27 Billion = R27 000 000 000 2. Divide by the cost of an average RDP house at a cost of R40 000 each 3. R27 000 000 000 / R40 000 per RDP = 675 000 houses 4. 675 000 RDP homes that could have been built for the poor! 5. At an average of 4 people per house, that is a roof over 2.7 Million poor people's heads!!! And the people of the land are happy and willing to continue being robbed???

      kalabafazi - 2011-09-15 09:44

      A desk top calculator is unable to compute these fugures. I don't think many people have any idea how much a Billion really is.

      DW - 2011-09-15 09:58

      And he has the cheek to tell ratepayers that they should not put their rates into ratepayers trusts, but should pay it over to the municipalities - why? So that they can waste even more? First show that you are trustworthy before these funds will be handed over. We taxpayers are not here to fund your luxuries. The money is meant for service delivery and you have proven to be a bunch of thieves stealing this money. If you think we should pay it over, please first allow us free access to help ourselves out of your personal bank account. It amounts to the same thing.

  • whatsinaname - 2011-09-15 09:27

    This after Gordhan lambasted taxpayers for setting up trusts to use their own hard earned cash to deliver services to themselves. The municipalities are USELESS!!!

      El Nicko - 2011-09-15 09:35

      because it was easier for the financial tellytubby to blame people , instead of admitting they stuffed up bigtime and give a plan forward.

      Mr Hobbit - 2011-09-15 13:36

      Yes - Gordhan did say we were very naughty to stop giving our money to the municipalities to just "waste" it. By waste, I mean STEAL.

  • (YNPL) Youth in need of a proper leader - 2011-09-15 09:28

    Start by eliminating political appointments in the government departments, bace employment on appropriate skills and qualifications. The incompitent people there dont have the mental capasity the change the current situation.

  • El Nicko - 2011-09-15 09:30

    27Billion rand !!! wow - thats a whole lot of RDP houses - Oh well , a Loota Continua & what me worry !!

  • Travis Vermaak - 2011-09-15 09:32

    In the the words of Tenacious D "The government totally sucks!"

      El Nicko - 2011-09-15 09:55

      Couldn't have said it better !!

  • kalabafazi - 2011-09-15 09:33

    "Outstanding debt was R62.3bin in December" "Municipalities could have saved R27bn in the previous financial year" =R89.3 Billion Does anyone here actually have any idea how much money that is!!!!! And nobody is held accountable for these loses. The mind boggles

      York Hunt - 2011-09-15 10:11

      A pile of R200 notes 0.5m high will give you R1 million. (if each note is 0.5mm thick). A pile of R200 notes 500m high will give you R1 billion. A pile of R200 notes 40Km high will give you R80 billion.

  • McDaNife - 2011-09-15 09:34

    Gordhan for presidency, just a dream. Probably will lose his job for these comments. Anc dont like honest people.

  • Bok Fan - 2011-09-15 09:35

    Pravin here is an idea Go work for the DA and take enough voters with you to put them in power. Until then nothing will change. How does it feel to know this zoo of fiscal insanity is what you fought for?

  • BigMoose - 2011-09-15 09:36

    What says our rotund Minister of Finance, the Honourable Pravin Gordhan, about this sad state of affairs? Is it any wonder that ratepayers are not paying their rates and taxes to incompetent and corrupt municipalities? It's "unacceptable" that our taxes are wasted by local government, Mr. Gordhan. Clean up your own "house" you hypocrite.

  • birdman - 2011-09-15 09:37

    "In addition there was a shortage of critically essential technical skills like those of qualified drivers, engineers and technicians". This is because they just don't want to hire whites who have these skills. The ANC would rather let the country fall into ruin before hiring the right person for the job!

      mercyS - 2011-09-15 10:46

      is the white engineers the "right person" for the job?? Pls dont turn this into a racial affair. There are "Non-white" engineers,like myself, out there that can do the job too. Judge each person for himself. OO by the way there are white people working for municipalities too. The issue i believe is mainly corruption, lack of proper skills and qualifications. And yes, in some instances, lack of good morals. Ministers must also lift their bums of the parliaments seats and do proper quality control/management. To see if their ideas do really work.

  • iamasouthafr - 2011-09-15 09:41

    Hey Malema - BIG Mouth, why don't the ANCYL do some good for a change and demand that this be stopped. Your leaders are benefiting from Apartheid not the WHITES!!!!!!!!! WAKE UP!!!!!

  • parkavenue - 2011-09-15 09:42

    Responsibility and Accountability clearly not in the Handbook.What a useless bunch we have running this circus

  • Jason - 2011-09-15 09:44

    Insane 27billion would buy how many text books? train how many more teachers... its time they started making a difference.

  • Templar - 2011-09-15 09:44

    Yet more money being wasted...come on Tony Erenreich, you're normally quite vocal when the DA's comment or threatened court action on this?

  • andy - 2011-09-15 09:45

    there is a first off solution that the government can have complete control of . they should issue an instruction that all motor vehicles bought for government use , or use by all public servants must be locally manufactured . this will stop excessive spending and also be a boost to the local industry . cosatu should welcome it too

  • one-way - 2011-09-15 09:45

    According to Loss Control policies, your figure of R27 bn is not correct. For every accountable rand lost , there are 50 hidden rands lost. Do the maths. However, the poor and previously disadvantaged , have developed an appetite to remind you of their plight ,which, you will not be able to satisfy. I suppose they can always eat cake. I can already hear the click of Madames knitting needles at the political guilotine. I always thought History was boring but this exciting stuff we are experiencing daily, gives me this warm but slightly fuzzy feeling that comes with 20/20 hindsight.

  • Enigma - 2011-09-15 09:48

    Suggestion: How about all govt officials be given same model cars, at least more or less same cell phone with limited airtime bill and always be monitored when travelling abroad or on vacation just like private companies. In this way no one will use the states money unnecessarily and if they do there should be a clause in their contract of employment that they'd be fired and all of their assets be frozen or seized until they can pay back the money they abused. Anyone that agrees please draft a petition so that we can sign it and send to those in power as we are the govt so to speak.

  • Dal68 - 2011-09-15 09:49

    So what will this crap government do abo it??

  • Cynic - 2011-09-15 09:50

    who is being held accountable?

      Travis Vermaak - 2011-09-15 10:16

      I don't think ANC understand what accountability actaully means.

      Felix - 2011-09-15 12:28

      They all counting their bills as we type.

  • pop101 - 2011-09-15 09:50

    What gets me is the fact that some people want the white man to pay extra guilt tax, for be wasted the same way? First get your house in order before I pay more tax than I have to.

  • Scorpius - 2011-09-15 09:51

    Charge "Too Little" for services???? What services. How can you charge for something you don't deliver!!! and no, the taxpayer associations is not "Militant"!!

  • SlapTjip - 2011-09-15 09:52

    Can someone please drill the above into our brain dead minister of finance's head. This comes after he stated that it is unacceptable for rate payers to form their own structures and prevent payments to municipalities. He did not speak from a financial view point but from a political view point namely looting the coffers. The egg is on you Minister of Finance.

  • sipholess - 2011-09-15 09:53

    Imagine the number if calculated from 1994 !!!!!! Come election time all the parasites will still vote ANC though.

      Enigma - 2011-09-15 09:59

      Please don't insult the voters but the leaders.

      sipholess - 2011-09-15 10:57

      @Enigma------First point...... they are definitely not leaders. Second point......The braindead voters are part of the problem. Third point........You Enigma, are one of the braindead voters.

      Enigma - 2011-09-15 11:22

      @Sipholess- Firstly their followers believe them as their leaders. 2ndly voters are part of the problem AND the solution. 3rdly You sipholess don't even know what political party I support but very quickly to assume and that my friend is a huge mistake as I don't support any political party but only movements such as teaching the youth of today about responsibilities and what choices to make in life. Politics don't do it for me because all of the politicians are crooks, black, white, coloured or whatever race. So my friend keep on doing what you do and you'll die a lost and lonely soul.

      sipholess - 2011-09-15 11:45

      My sincere apologies Anigma........You are one of the braindead non voters.

      Enigma - 2011-09-15 14:59

      apology accepted, however I can see that "braindead" is the only word that you proud of in your vocabulary. You should consider stupid, uneducated, dumb or better ignorant, now all of that will be describing yourself. IDIOT!!!!!!!!!!!!!!!!!

  • ian.d.samson - 2011-09-15 09:53

    Name and shame! We DEMAND full disclosure of all the municipalities that are involved. This makes a mockery of Gordhan's call against the rates boycott. SA Ratepayers are no longer prepared to fund this type of wanton waste without recourse. It's time for SA Ratepayers to go on strike and take class-action law suits and sue these municipalities under the Municipal Services Amendment Act and the Consumer Protection Act.

  • happycamper - 2011-09-15 09:57

    O my word...FAT BLACK CAT Peanut butter

      Servaas - 2011-09-15 10:08

      Crunchy... These clowns can never be smooth.

  • Kevin - 2011-09-15 10:04

    Gordham - Do not tell us and make us cross. Resign and admit you and your cronies are stuffing it up every second of every day.

  • York Hunt - 2011-09-15 10:07

    And Zoomer had the cheek to say South African blacks are impoverished because of lack of opportunities? And that AA needs to be tightened? Thieving ANC scum!

  • Ang - 2011-09-15 10:07

    Why bother saving when your expenditure can be covered by increasing the costs to the ratepayers each and every year by excessive amounts!! Considering most middle class families are now at breaking point, how long do you think this is going to last?

  • Arthur - 2011-09-15 10:13

    A rational thinking person would find wasting 27 billion totally unacceptable and demand a new government, this leads me to believe that all the people who vote ANC must be retarded.

  • Kevin - 2011-09-15 10:13

    The problem is that every job that has to be done goes to an BEE company who has to pay a under the table bribe to ten people . This pushes costs up 50% . The job mysteriously has extra costs which are false but is paid out and another crook buys a new Mercedes. Get rid of BEE status and there will be enough money to create work for everyone and cut costs for ratepayers. Gordhans audit of municipalities means zero . All the auditors do is see that the invoices ,receipts and payments are done . The crookery that those invoices hide is never investigated or looked at . Change your audit and you will have to lock up all your buddies

  • Swart_Baas - 2011-09-15 10:14

    now that teh findings have been made, whats going to heppen, huh Pravin? or was the exercise just another wasteful expenditure of our hard earned money!!!!!!!!!!!!!!!!!!!!!!!!!

      Sharkie - 2011-09-15 11:23

      Yup - eish heve you seen my new door stope? It was e special gift from my dea frend Minista Gordhan.... Mena while back at SAPPI...... "Sir sir...!!!! The report on municipalities has delpleted our paper reserves - and the trees arn"t growing fast enough!!!!" Don't worry son.....I'll call Julias - he can just talk over the trees....

  • Travis Vermaak - 2011-09-15 10:15

    Doesn't surprise me in the least, but it sure pisses me off. Thats what you get when you vote for your beloved ANC. Corruption and a general lack of morals and ethics. We seem to have no say in how taxes are spent. I wish I could pay my taxes to an organisation who would spend them wisely, and not on the f'ing latest Mercs and Beamers for underserving officials every year.

  • Darwinian - 2011-09-15 10:17

    African Agenda in full swing....

  • proudly - 2011-09-15 10:22

    They are too fat to fit into smaller cars! Skills shortage-BEE did not work!

  • Badballie - 2011-09-15 10:22

    just more conclusive proof of the cANCer eating away at this country, Democracy is truly dead when the criminals have the power to enforce laws designed to protect them and hide their criminal activities. Please could someone vote in a black government that can actually be trusted, the ANC has lost its legitimacy as a government and needs to treated as the treasonous criminal entity that it truly is.

  • Mark Singh - 2011-09-15 10:24

    Pravin Gordhan has spoken. Im sure the municipal bosses are terrified by now. No, serioulsy they must be laughing their socks off, coz they really dont give a hoot. They feel the municipal budget is there to finance their luxurious lifestyles.

  • York Hunt - 2011-09-15 10:39

    And Zoomer had the cheek to say South African blacks are impoverished because of lack of opportunities? And that AA needs to be tightened? Thieving ANC scum!

  • tripwire - 2011-09-15 10:40

    Welcome to SA , where we are already desensitized by Corruption. I am impress if I don`t year about another corrupt official every 24 hours. You masses get what you voted for (promises ,promises) , soon the Taxpayer will pay 50% of our salary to all the new Taxes , tolls , NHI , electricity etc just to sustain this governments Greed and Corruption . There is no plans to fix this, I just wished I had a ticket on this more than 10 year old Gravy Train, life`s good even after you have been ousted as a Corrupt official .. tomorrow your back in office with a raise.

  • 1of49Million - 2011-09-15 10:46

    R27bn... Let us put that into context... The municipalities have taken R540 from each and every South African citizen (assuming 50M population)... WOW!!!

  • jnrb71 - 2011-09-15 10:49

    And then that other guy called Schalk wrote an extensive article here teh other day on a new tax for white people who benefitted from apartheid. Look what they do with the tax legally collected!! Do you think a new tax will actually reach the people? In Africa ‘the leaders eat first and the population gets whatever is left over' (if anything)

  • jen - 2011-09-15 10:51

    That money could have been used to create jobs and opportunities for young blacks - as they have no opportunities according to Zuma.

  • Who Knew - 2011-09-15 10:55

    That's the Poephols Party, sorry I mean Peoples Party, for you.

  • - 2011-09-15 11:01

    So if this is the case why do we need increased taxes to implement the NHS?

  • Sharkie - 2011-09-15 11:09

    He believed some “progress” had been made, but cautioned municipalities to rather spend their budgets on necessary infrastructure development and maintenance. Wait?!!!! You want to tell me I'm NOT paying taxes for Mercs, BM's, parties, phone calls etc etc taxes should actually go toing potholes, and ground water seepage in Elgin Rd in Kempton Park, and sewage treatment facilities and water pump stations to prevent it's decay and sewage spilling into rivers and mean my taxes are for fixes street lights, and maybe getting electricity and water to those that don't have?!!!! OMW! what white imperialist tendencies are these!!!

  • Kevin King - 2011-09-15 11:10

    Funny how Kolobe, Polio, Half-Wise, Prev-Abused and Zizo all took they day off their government jobs today???

      Felix - 2011-09-15 12:32

      All the same guy, I think he actually works for news24 though.

  • beicime - 2011-09-15 11:11

    When incompetence is appointed, one can't expect better. Africans are worst to tehmselves than imperialists.

  • Sharkie - 2011-09-15 11:18

    “militant” taxpayers' associations, which held back payments due to disputes with municipalities. How DARE organised intelligent people keep their hard earned money out of our party arrangements and give it to people willing to do the fixing. Eish these militants hey....... "In addition there was a shortage of critically essential technical skills like those of qualified drivers, engineers and technicians." Yes - what happens when you tell those that have skills that they not wanted, when their families are murdered etc etc etc..... Love how the 65% growth in in "other" departments. Yes - the sit around and have a fat chat department or the eat or lunch for three hours department. But Lord forbide we hire any non BEE clever guy engineer - eish theeese guys.... an the 52% growth in salary accounts - wow! But we'll strike again next year and demand better wages or else.......

  • Sisie - 2011-09-15 11:19

    Wow are you only waking up to the fact now - is it an election year by the way? Only seem to talk the talk in an election year - have yet to see them walk the walk.