Salga reiterates call for local business tax

2012-01-13 14:08

The SA Local Government Association has reiterated its calls for government to introduce a tax on local business to aid ailing municipalities after a Treasury report painted a bleak picture of some councils in “financial distress”.

The association defended some municipalities, saying the expectations on local government to deliver, without the skilled and qualified managers in key positions, set councils up for failure to manage their finances.

Aside from a proposed local business tax to fund economic services and infrastructure, Salga’s recommendations include promoting peer learning and support between municipalities and private institutions (for example, banks) to continuously improve systems of financial management.

Treasury’s report on the financial performance of municipalities between June 2010 and June 2011 noted some improvements but highlighted failures in most areas.

Treasury said new mayors were more concerned about the cars they drive and the perks they get than they were about serving communities, a trend it noted was still ongoing.

Salga said Treasury’s report should have captured the fact that municipalities’ poor audit outcomes have gone down by as much as 48%.

“It is imperative to note that the financial performance of municipalities should not be looked at in an isolated year but should focus on trends over time,” said Salga.

While more work still needed to be done, the improvements at local government level should not be undermined, said the association which speaks on behalf of the country’s 283 municipalities.

Salga conceded that a few municipalities were in financial distress, adding, however, that there were numerous reasons for this, including government departments that were not paying for rates and services.

“Some are in rural and, or declining economies thus having a low revenue base while still expected to deliver services to communities that are, at times, too poor to pay for services.

“Hindered revenue collection is not limited to poor households, as it was found that some institutions, including government departments fail to pay for rates and services. This, coupled with mandates that were not planned for financially, put pressure on already stretched municipal finances,” said Salga.

The establishment of Municipal Public Accounts Committees in each council, would improve the monitoring of local government spending and performance in the same way similar committees have improved their financial standing, said Salga.

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions. publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.