The 7th Parliament has a historic opportunity to make a real difference in the lives of South Africans by reforming the structure and funding of local governments.
The 7th Parliament of the Republic of South Africa has been elected, and for the first time in our nation’s history, no single party has secured a majority. This election has ushered us into an era of coalition governance. While this presents both challenges and opportunities, it is imperative that we seize this moment to address the pressing issues facing our local governments.
Past iterations of Parliament have largely been ineffective in advancing meaningful legislative reform for local government. Will the next Parliament be different?
Serious considerations need to be given to the funding model for local government, which is currently unsustainable for many municipalities, especially those in KwaZulu-Natal.
Funding
Local governments in South Africa are struggling under an unsustainable funding model. The challenges are manifold and severe. Municipalities are tasked with providing essential services in regions plagued by high poverty and unemployment rates.
This creates a vicious cycle where municipalities lack the resources to improve infrastructure and services, which in turn stifles economic development and job creation.
Additionally, there is an urgent need to address the complexities of property taxation on land owned by traditional authorities. In many cases, this land includes valuable properties such as mansions owned by well-off citizens. Yet, these properties often escape proper taxation, depriving municipalities of critical revenue.
Local governments are increasingly burdened by responsibilities that traditionally fall under other departments such as the Department of Social Development, the Department of Human Settlements, and the South African Police Service. These failures shift the burden on to local governments without accompanying financial support.
The frequency and severity of weather and climate-related disasters are rising. Municipalities are at the front line of response and recovery, yet they lack adequate resources and support to manage these crises effectively.
Poor macroeconomic policies have led to a shrinking tax base, further straining local government finances. This limits the ability of municipalities to fund critical services and infrastructure projects.
The transition to solar energy, while positive for the environment, has led to a decline in income from electricity sales for municipalities. This revenue loss has not been adequately compensated, creating significant budget shortfalls.
Eskom’s control over many income-generating areas hampers local government autonomy and financial stability. Municipalities need greater control over their energy resources to manage their finances effectively.
The equitable share allocation, which is supposed to ensure fair distribution of national resources, is overdue for review. The current allocation formula does not adequately address the unique needs and challenges of different municipalities.
Mismanagement at national and provincial government levels has led to a reduction in grant funding for local governments. This has left municipalities struggling to maintain even basic services and infrastructure.
To address these challenges, it is not enough to merely tweak the funding model. We need a fundamental shift in how powers and responsibilities are distributed between different levels of government.
The devolution of powers to local governments must be a priority. Local governments are better positioned to understand and address the unique needs of their communities. Empowering them with greater autonomy and resources will lead to more effective and responsive governance.
In this context, we must also reconsider the role of district municipalities. While they were established to coordinate and support local municipalities, in many cases, they have become another layer of bureaucracy that impedes rather than facilitates effective governance. Streamlining or even eliminating district municipalities could free up resources and reduce administrative overhead, allowing local governments to operate more efficiently.
The 7th Parliament has a historic opportunity to make a real difference in the lives of South Africans by reforming the structure and funding of local governments. This requires bold leadership, innovative thinking and a willingness to challenge the status quo.
We must advocate a new funding model that reflects the realities faced by local governments, ensuring they have the resources needed to provide essential services and promote development. Furthermore, we need to push for legislative reforms that devolve more powers to local governments, allowing them to respond more effectively to the needs of their communities.
This includes reconsidering the role of district municipalities, and ensuring local governments have the autonomy and support they need to thrive.
The challenges faced by local governments in South Africa are significant, but they are not insurmountable. With the right reforms and a commitment to genuine change, we can build a more sustainable and equitable future for all South Africans. The 7th Parliament must rise to this challenge and deliver the meaningful reforms that our local governments desperately need. DM