Fred Nel MPL
Spokesperson on Local Government
Gauteng municipalities are collectively owed R27.9 billion by consumers who are 61 days or longer in arrears with their payments. This is contained in the latest Provincial Gazette published by the Finance MEC on 11 February 2013 for the quarter ending 31 December 2012. This is an increase of R587 million in debt owed to municipalities, compared to the end of March 2012. On Tuesday the South African Local Government Association (SALGA) indicated that municipalities countrywide are owed R81 billion in debt; meaning Gauteng alone represents a third (34%) of the debt owed to municipalities nationwide. A huge number for a province that only has 4% of the municipalities in South Africa. Municipal debtors are a major problem for municipalities as it affects their ability to render services to their clients (residents and businesses). This leads to higher levels of dissatisfaction among municipal clients and manifests itself in service delivery protests. Indicative of this is the fact that there were more service delivery protests in 2012 than ever in the history of Gauteng province. A further indication of the impact of the arrears is that R27.9 billion can build 373 000 RDP houses in the province. In order to turn this situation around the financial departments within Gauteng municipalities must be strengthened. Professional and qualified staff must be appointed instead of political appointments. The Gauteng province should also investigate the option of involving SARS in the collection of municipal arrears by linking municipal account holders with their income tax. If this situation is not addressed urgently it will affect the financial sustainability of municipalities in Gauteng which could place an unwanted burden on the provincial government to potentially bail them out.