The Cooperative Governance and Traditional Affairs Minister Nkosazana Dlamini-Zuma says that government is looking at changing the funding model for municipalities.
She was speaking at the Local Government Summit being held in Boksburg in Johannesburg over the next two days.
Over two thousand delegates are attending the summit which brings together local officials, traditional leaders, academics, representatives of civil society organisations and funding institutions.
Currently, municipalities are allocated three revenue sources to fulfill their mandates which are property taxes, surpluses from services provided and grants from national government.
However, for some municipalities, money collected is inadequate, with the Auditor-General having found in 2020/21 that 28 percent of municipalities are on the verge of collapse.
Dlamini-Zuma explains how the current funding model came about. “We based the funding model on the assumption that every municipality has a revenue base from which to get its revenue and put together its budget. We did not take into account that this wall-to-wall municipality means that we are extending services to people who are indigent, there is high unemployment, so some of the municipalities are not able to raise their own revenue but they still have to provide services to communities.”
The live stream below is of Day 1 of the summit and includes Dlamini-Zuma’s address:
Meanwhile, speaking at the Local Government Summit as well, Gauteng Premier David Makhura said that the era of coalition governments in the local sphere needs a great deal of patience as it has proved disruptive for development.
He says it’s sad to see coalition governments failing.
“Almost every year on average in Italy there is a change of government but interestingly it does not change the functioning of government much. It is strong institutions but also it is also strong vision and sound mobilisation, strong vision because these disruptive coalition governments are very frustrating not just for citizens but for me the Premier. You can’t have a meeting with new people all the time, they always start as if you were not there it’s also frustrating for citizens.”