Gauteng committed to paying for municipal services

The Gauteng Provincial Government has noted the statement issued by the Mayor of the City of Johannesburg, Cllr Herman Mashaba on the ‘non-payment’ of rates and services. The current administration made a commitment as far back as 2014 to ensure challenges relating to billing and unpaid municipal rates are addressed.

One of the key interventions that were put in place to deal with municipal debt is the establishment of a debt committee within the Treasury Department to manage conflicts over billing.

The debt committee consists of finance officials in municipalities as well as the province. It functions as the first port of call between the department and municipalities in cases where there are disputes over the disconnection of municipal services because of outstanding debt.

According to the latest quarterly report on Municipal Financial Performance published in the Government Gazette no 266 published on 11 August 2016, the City of Johannesburg is owed R16 101 787 billion by government, residents, and business.

The R16, 1 billion debt is divided as follows:

1. Government and Parastatals – R588 304 million (3, 7%)
2. Commercial – R6, 4 billion (39, 9%)
3. Residential – R8, 7 billion (54%)
4. Other – R388 million (2, 4)

As at June 2016, the Gauteng Provincial Government owed R242 503 million, which is 1, 5 % of the R16, 1 billion in rates and services. We are committed to pay undisputed invoices. Our commitment is demonstrated in the amounts that the Gauteng Government has paid to various municipalities between April and July which amounts to R384 million to settle municipal debts for all its departments.

While the Gauteng Provincial Government has consistently made provision for payment of municipal rates, it was discovered that the allocated budget was not sufficient to cover historical debt which had accumulated due to disputed bills.

In the tabling of the 2015/2016 Provincial Adjustment Appropriation the MEC for Finance, Ms Barbara Creecy, made additional allocations for municipal services accounts totalling R334 million. This amounted to a total payment of R679 million by the end of the financial year.
In the tabling of the 2016/2017 Provincial Main Appropriation the province allocated an additional amount of R1, 2 billion over the Medium Term Expenditure Framework to address the property rates accruals. This has boosted the budget allocation to over R800 million by the financial year 2018/19. This demonstrates the full commitment by the Provincial Government in ensuring that monies due to municipalities are paid.

The Premier has also expressed concern about the tone of Cllr Mashaba’s statement and its implications for the Constitutional imperative of cooperative governance. There are a number of areas where the province works with municipalities through joint committees such as health, housing, and budgets just to mention a few. “The fact that there are new mayors who have not taken time to familiarise themselves with our work does not mean issues raised have not been dealt with”, said Premier Makhura.

Issued by Gauteng Provincial Government

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