Cape Town – Government had to draw up a budget for 2017 in an environment of difficult trade-offs – one of which was decreased allocations to the three spheres of government, said Deputy Finance Minister Mcebisi Jonas in Parliament on Wednesday.
Jonas was the last speaker in a debate on the Division of Revenue Amendment Bill, which considers the way in which the budget is allocated to national, provincial and local government.
Jonas said the difficult context in which the budget was compiled was “well documented”, citing South Africa’s low GDP growth of only 0.3% last year and a challenging and uncertain geopolitical environment as examples.
This all means government had a limited fiscal space in which to act.
He emphasised that National Treasury prioritised allocations to rural municipalities and provinces in reaction to many opposition MPs criticism that the budget was taking away too much resources at local government level.
He asked that municipalities prioritise spending on infrastructure maintenance and look beyond the transfers from the fiscus to stimulate growth. “We ask you to build partnerships with the private sector and even state-owned entities – there is significant scope for municipalities to improve in this regard.”
During the debate earlier, opposition MPs criticised the fact that only 9% of the overall budget was allocated to municipalities. The EFF’s Nazier Paulsen said with these meagre allocations municipalities will remain dysfunctional.
“Municipalities must raise most of their revenue themselves, yet they can’t charge from those who are poor and jobless. “It’s like trying to squeeze water from a stone and for this reason we’ll see more politically motivated service delivery protests this year.”
Mkhuleko Hlengwa from the IFP said in his speech that government’s current paradigm of “wants over needs” will do nothing but to obliterate the state.
“It’s common cause that R246m was spent on (President Jacob Zuma’s homestead in) Nkandla, but the irony is that the Nkandla municipality with 13 wards only got a budget or R150m. If one of the villagers get such a big house and the rest has to live on R150m it means municipalities are being set up for failure.
ACDP MP Steve Swart said it is concerning that the expenditure ceiling was lowered with R10.2b – money that is allocated to the three spheres of government. “And this is done when provinces and municipalities need to service growing populations with growing needs,” Swart said.
The DA’s Alan McLoughlin said because of the low allocation of 9% of the budget to municipalities they need to cut on capital expenditure. “It will be an impossible task for municipalities to do maintenance as no grants have been provided for it.”