DACRE HADDON SPEAKING ON THE MOTION ON OUTSTANDING MONIES TO MUNICIPALITIES OWED BY NATIONAL AND PROVINCIAL DEPARTMENTS

Honourable Speaker, Madam Premier, Honourable MEC’s, MPL Colleagues, officials, media and guests.

In an article in the Business Day of 3 December 2009 titled “Gauteng Still in Arrears on Utilities Bills” by reporter Sibongakonke Shoba, he refers to the municipalities in the provinces of Eastern Cape and Limpopo being owed more than R1billion in outstanding debt.

Honourable Speaker, Shoba in the same article stated that the country’s big 9 municipalities, including Metro’s, were owed R26,8 billion collectively by National and Provincial governments .

I highlight this scenario Speaker so that this province can be the example – the beacon in collection of all outstanding monies owed to it by government departments.

While there has been some marginal progress in paying over these monies, since the end of last year, this effort is not sufficient to catch up on the ever increasing backlog of monies due to these institutions.

Honourable Speaker, as part of the Democratic Alliance’s “Agenda for Accountability” and the Open Opportunity Society . . . it is time for action!

An Open Society believes in honesty, transparency, accountability and responsibility.

An Open Society is where freedoms of people are protected and people are free to live their own life and enjoy individual rights without impeding on the rights of others.

In an Opportunity Society Honourable Speaker, people must be able to access opportunity that will assist them to be and develop into the best person they can become.

Without sufficient funding for the state to facilitate opportunities for citizens the potential of citizens is wasted and dies. Thus, by not collecting monies due from provincial and state departments we are denying citizens these very opportunities.

The DA will continue to drive this issue both provincially and nationally until municipalities are paid what is due to them on a sustained basis.

Honourable Speaker this Legislature must stop being a posturing talk shop!

Instead Honourable Speaker this Legislature must become an “action” shop!

Speaker, as of 31January 2010 the Nelson Mandela Metro was owed R57,238 million by Province and R25,021 million owed by National Departments giving a total debt to the Metro of R82,260 (including interest) as of this date.

The interest owed as of end January for the Province was R4,35 million and with national departments debt added to this, the figure rounds off to R4.38 million.

The Provincial department with the biggest outstanding debt to municipalities is the Education department – with an amount of R30.92 million (arrears and current).We have been informed that most of this money owed is for school rates.

Speaker, Public Works (PDWP) owes R19.02 million (arrears and current to date) as of 31 January 2010.

Speaker by end of January 2010 overdue amounts owed by province were R76,109 million made up of services R55,813 million and rates of R20,295 million.

However, Speaker when examining National departments, the department of Economic Development and Environmental Affairs gets first prize for owing R18,99 million out of a total National obligation of R24,24 million. All these amounts are inclusive of interest.

Clearly Honourable Speaker the offending MEC’s are not doing their jobs by fast tracking payment of these monies and need to be taken to task for this.

Honourable Speaker, I would like to highlight some of the reasons for these payment delays so we can sensitize ourselves to these challenges.

The reasons given for these payment delays are many.

As stated in writing by the CFO of the Metro in a letter to the Municipal Manager dated 3 February 2010 some of the problems highlighted are:

With regards to the Health Department this is what the CFO said (and I quote verbatim)

“This department made a payment of R426065 in January 2010 which was insufficient to clear the outstanding arrears.

According to the District Offices, the payment system has been closed as there are no funds available. The Health Department in a press statement of 4 February 2010 confirmed the department overspent by R1,5 billion for the present financial year ending 31st March 2010 and have put a freeze on all payments to service providers.”

If we look at Education Honourable Speaker their tale of woe reads as follows:

“This department made a commitment in December 2009 to pay R15 million towards arrears before the end of January 2010 at a meeting with the Acting CFO.

Unfortunately, the R15 million payment was not made in January 2010. Budget and Treasury contacted the District offices about their money but their authority to make payments has been withdrawn. Budget & Treasury tried on a daily basis to contact the Education Departments CFO who had given an undertaking that the money available was paid.

It should be noted that she did not reply to any messages left on her cell phone in this regard!”

Finally Speaker if we look at the explanation by the Metro CFO regarding Public Works:

“The department made payments of R9,090 million during January 2010.This department has appointed Audit company Ernst & Young to reconcile and verify all their accounts. The Budget & Treasury office has made space available to this company to assist with the reconciliation.”

Honourable Speaker what do we do to turn this situation around?

I refer to the State of the Province address by the Premier on 19 February 2010.

In her address, the Honourable Madam Premier referred to and I quote:

“Our success as Government depends on the effectiveness of local government as the key site of service delivery.”

Further Honourable Speaker, the Premier had said and I quote “This will go a long way in restoring people’s confidence in the sphere that matters most, Local Government.”

The problem is Madam Premier that unless we as a Legislature actively start paying monies over to our municipalities from our Provincial and National Departments immediately, efficiently and on a sustainable basis then the people’s confidence will NOT be restored in Local Government in this Province for a very long time!

In the Lukhanji municipality Honourable Speaker, the bulk of money owed by the Provincial Education is for rates of schools which were not registered by Public Works.

Government owes R9.26million to this municipality.

In Buffalo City, which is owed as of 11March R4,324 million in respect of rates and service charges only, Education owes R1,363,902 while Health owes R1,026.28million.

Speaker- in the Makana municipality, the amount owed by Province is R11,152 million and National departments owe R3,7million.Honourable Speaker, the house should be appalled to hear that over R8 million of this money(or 73% of this debt) is owed by Bhisho Provincial Public Works.

Of this amount Honourable Speaker, R6,956 million is owed for more than 120 days!

On a recent oversight visit with the Portfolio Committee on Local Government and Traditional Affairs the Mayor of Mnquma municipality asked for Province to assist them with the money owed to them.

The committee was informed that R19million is owed by government.

As a result of the non payment of this money, this municipality has had to close down its library in order to cut costs due to non receipt of this funding!

Honourable Speaker, the few examples mentioned of outstanding monies owed to municipalities is a small sample of this gigantic backlog of payments due to municipalities.

The inability of residents and consumers to pay for municipal services can then be cancelled out to some extent by speedy payment by provincial departments owing money for services to municipalities.

Honourable Speaker, there is much Legislation regarding the payment obligations of Provincial and National departments to municipalities. As we all are aware of this legislation ranging from the Public Finance Management Act (PFMA- MFMA) I shall, to save time, not harp on these legislative requirements now.

Honourable Speaker, in conclusion let us remind ourselves across all parties in this house that we are here to affect a better life for all our communities in this province.

While there are understandable capacity and financial challenges facing this province, let us do all we can together to minimise financial challenges by paying provincial dues on time to our municipalities in order for them to deliver more services to their communities.

I thus move Speaker the motion on the order paper and ask the house to resolve to approve this motion.