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Update on SALGA concerns with procedural and substantive aspects of the Municipal Cost Containment Regulations, 2019

 

 

 


Posted: 24 June 2019

Recently on 7 June 2019, the Minister of Finance, in concurrence with the Minister of Cooperative Governance and Traditional Affairs, promulgated the Municipal Cost Containment Regulations, as an attempt to “ensure that resources of a municipality and municipal entity are used effectively, efficiently and economically by implementing cost containment measures”.


The Regulations purports to apply to all municipal officials and political office bearers in municipalities and will come into effect as from 1 July 2019, coinciding with the start of the new financial year for municipalities.
Deliberations by the SALGA NEC at its meeting on 13 June 2019, re-affirms its longstanding view that SALGA is in support of any initiative which seeks to introduce efficiencies and manage and contain costs within municipalities, as already initiated and implemented by a number of municipalities, the SALGA NEC, however, has procedural and substantive concerns with the regulations.


Particular concerns relate to whether all procedural aspects, as outlined and prescribed in the Municipal Finance Management  Act (MFMA), have been complied with by the Minister of Finance prior to the promulgation of the Regulations, these include:-

  • Securing concurrency from the Minister of COGTA;
  • consultation on the substance of the regulations with all relevant stakeholders, including organized local government;
  • obtaining public comments on the draft regulations in the Government Gazette for public comments; and
  • subjecting the draft regulation to parliament for scrutiny before their promulgation.

A further concern is that the regulations are not in line with the MFMA itself and are in direct contravention of other related legislation, particularly as it relates to the remuneration of public office bearers (Councillors).
Informed by these concerns, the SALGA Presidency, as mandated by the SALGA NEC, has engaged with both Ministers of Finance and Cooperative Governance and Traditional Affairs respectively, with a view to find an amicable solution to the concerns. Following the respective engagements the Presidency wishes to confirm progress as follows:-

1.ENGAGEMENT WITH MINISTER OF COGTA: Following a meeting with the Minister of COGTA, Hon. Dlamini Zuma on Friday, 14 June 2019, it was agreed to place the matter as an item for discussion at the COGTA MinMEC scheduled for 19 June 2019. After deliberations the COGTA MinMEC resolved to recommend that the implementation of the Municipal Cost Containment Regulations should be stayed until the concerns of all parties (COGTA, SALGA and MECs for COGTA) have been addressed; and

2.ENGAGEMENT WITH MINISTER OF FINANCE: Following a brief interaction with the Minister of Finance on 14 June 2019, it was agreed to convene a formal meeting on the sidelines of the State of the Nation Address. This meeting was duly held on 20 June 2019. A key outcome of the said meeting was that urgent engagements with all stakeholders should be convened to allow for the tabling and consideration of specific concerns, with a view that these deliberation will determine the next steps with regard to the Regulations. The first of these meetings are already scheduled, at technical level, for Monday 24 June 2019.    
The SALGA Presidency has confidence that the agreements as reached above will lay the foundation for an amicable solution to the matter.

 

 

 
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