The Constitution (Act 108 of 1996) has been in place for some years now but the full and rightful position of local government as envisaged by it has not been achieved. The comments which follow are to be seen in the light of this. Please note the governance of South Africa is through a system of three equal spheres of government with each having its own specific rights and duties. Included in rights is local government’s right to an equitable share of centrally collected revenue (214/1(a)) plus other specific allocations. It follows that all spheres should be treated equally. Chapter 10 of the Constitution provides for a framework for managing transition at local government level. Not only does this chapter entrench local government transition, but it also lays down certain constitutional principles that effectively protect the autonomy of local government within the framework of a three-tier governmental system. The comments that follow are based on these constitutional provisions.

1. Payment of Services

The payment of services remains the single biggest problem in local government at present. Those councils which have efficient credit control and debt collection mechanisms have some success in collection but it must be emphasised that this is a very costly exercise. If income tax was voluntary how many people would pay? One believes that central government would be in a similar position to local government. Our contention is that as an equal sphere of government local government should be able to collect revenue at source in the same manner as PAYE. The single biggest problem of non-payment is people who can pay but have become used to not paying.

If service charges and rates were collected at source from wage earners a great burden would be lifted from local government and would result in revenue savings and credit control. What is needed is (1) Legislation to allow for this, probably as an enabling clause in the Municipal Systems Bill (2) An administrative business plan for collection

 

 

 

 

2. Transition/Transformation Fund

Old local government only provided services and had to balance its books accruing from revenue earning accounts. New local government is developmental and has many non-revenue producing services, for example :

• Integrated Development Plans and its consequences
• Indigent Policies
• Reconstruction of Townships
• Integration of municipalities with staff and physical needs
• Services such as health, libraries, water, fire, traffic and roads which are not funded by the national departments which delegate unfunded mandates to local government. Local Government has no way of receiving the money

The present allocation of monies for the transition from many municipalities to fewer ones is inadequate and needs to be reviewed on the basis of actual expenses.

The biggest challenge facing the Port Elizabeth-Uitenhage-Despatch metropole in this regard is how to meet the basic socio-economic needs of the majority in a way that is sustainable?

1. Equitable Share

The Budget Forum with the Minister of Finance has decided on a process to review the allocation of equitable share money to local government. The present system of transfers for "indigent people" only is not acceptable and is being reviewed to be in line with the Constitution’s provisions.

 

 

 

 

 

2. Councillor Allowances

Two issues come to mind :

1. Quantum

For fifteen years the councillor allowances have lagged behind those of national and provincial representatives. With the new demarcation, recognition must be given to the fact that many councils now have greater responsibilities than provincial legislatures. We must not forget that local government is also the basic delivery level of all national services. The workload of a councillor is much greater than that of a MPL (especially if that person is a member of the city’s executive). Ward councillors have daily interaction with their constituents. For local government to survive, people of ability must be able to make a living through being councillors and therefore must be paid accordingly.

2. Origin of Allowances

If National and Provincial representatives are paid from taxes collected nationally, the question begs – Why are councillors not paid in the same way? This would allow :

• Small towns to afford efficient and able people without destroying the local budget
• Allows councillors to be paid what they are worth without the political stigma of " taking the communities money".
• Raises the position of councillors to one which can be aspired to by able people. This point can be seen as one of the ways of turning around the present position of local government. It will attract able councillors and administrators which will encourage an improved management of local government.

South Africa has now joined several other countries in Latin America, Southern Europe, Eastern Europe, Asia and Africa which have gone through a non-revolutionary regime transition to democracy over the last twenty-five years, there is no other case where national-level constitutional transition has been accompanied by complex local-level transition. This has major implications for the future quality and durability of South Africa’s young democracy and for the sustainability of the envisaged development process.

The conditions that people face, and the extremity of need, is in contrast with the reality of a limited fiscal base. The central challenge facing local government is how to address the complexities we are faced with using what exists in terms of state apparatus as well as resources that have been built up in our local communities. The Municipal Systems Bill along with the White Paper, Municipal Structures Act and Demarcation Act paves the way for good and effective governance at local level.