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SALGA calls for Fiscal Transformation


Posted: 11 May 2018


SALGA president Councillor Parks Tau says SALGA will continue to advocate for an equitable fiscal dispensation that is considerate of the assigned mandate and the many responsibilities undertaken by local government.  He said the unresolved issue of Powers and Functions continues to frustrate municipalities as it is upon its resolution that issues of the fiscal framework, the unfunded mandates and the revenue instruments of municipalities, particularly the districts, could be resolved.

SALGA argue that the slashing of R 3, 5 billion municipal infrastructure grants in the medium-term will have a knock-on effect on regional economic development.  “We do need to find urgent alternative interventions in this area so that we don’t undermine economic turn-around through unwisely measures in dealing with grants underspending,” said Tau.

Councillor Parks Tau says He said most concerning is also the sufficiency of the two main trading services – electricity and water. Can these two trading services still provide surplus funds for municipalities? If not, what then are the other sources of revenue from which municipalities can cross subsidize other services? Councillor Parks Tau says SALGA will take into consideration the impact of increases in bulk tariffs of these two services over the past ten (10) years, and how renewable energy and droughts have affected the ability of municipalities to generate surpluses from these services.

Councillor Parks Tau says SALGA will continue to advocate for effective approaches to debt reduction in the local government sphere.

SALGA, therefore propose the following:

  1. A Bill on the write-off of household debts to municipalities;
  2. Amendments of the Tax Administration Act to allow for access of non-financial data to improve municipal billing and the proposal of payment of municipal debts before tax refunds are made;
  3. The amendments in the Municipal Systems Act schedule 10 to extend its provisions to all employees and Public Office Bearers benefiting from the fiscus;
  4. A study on the Financial and Fiscal Repercussions of Eskom’s Role in the Electricity Distribution Industry on Local Government.

SALGA president Councillor Parks Tau said there is little doubt that what is needed is the political will to empower and capacitate the sphere of local government more.

“We are entrusted to deal and address complex service delivery demands, but as of yet, these issues require a more harmonious coordination and collaboration with both provincial and national governments in functions that local government can more achieve and realise,” he said.
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