We have to stop treating local government like a junior partner

When we talk about government performance, service delivery and accountability, we often overlook one crucial question: who actually collects the money? In South Africa’s three-sphere system of government, revenue tells us a great deal about responsibility and even more about power.

As the mayor of a local municipality, I’ve come to appreciate just how much the balance of power in government is shaped by who controls the purse strings. In our case, it’s not always who you might expect.

Big budgets, limited collection

Let’s begin with provincial government. At first glance, KwaZulu-Natal’s provincial budget for the 2025/2026 financial year stands at an impressive R158.5-billion. But look a little closer and you’ll see that more than 97% of this budget comes from national government transfers: specifically, the Provincial Equitable Share and conditional grants.

So, how much does the province actually collect on its own? Roughly R4.3-billion, or just 2.7% of its total budget. That figure is derived largely from vehicle licensing fees, patient payments at public hospitals, gambling taxes and interest income. Not exactly a wide playing field.

But this is not due to inefficiency or a lack of effort. The Constitution provides provinces with very limited taxation powers. Their primary role is to spend, not raise revenue.

In essence, provincial governments are delivery arms for national policy, especially in sectors such as health, education and agriculture.

The real revenue collectors

Now let’s consider local government. Municipalities are responsible for property rates, water, electricity, sanitation, waste collection, land use management and more. And unlike provinces, we are expected to fund a substantial portion of these services ourselves.

While we do receive national transfers, mostly to support infrastructure delivery and assist low-income households, the majority of a municipality’s budget must be generated through its own revenue, especially from rates and service charges.

In uMngeni, for example, we’ve had to modernise our billing systems, improve debt collection, invest in prepaid metering and enforce credit control, all while grappling with load shedding, ageing infrastructure and growing community needs.

Unlike our provincial counterparts, we can’t afford to wait for transfers before taking action.

Autonomy, risk and accountability

This comparison reveals something significant: municipalities bear more fiscal risk but also have greater fiscal autonomy. We are empowered and expected to generate income and remain financially viable. That makes local government arguably the most entrepreneurial sphere of government, but also the most vulnerable when revenue collection falters.

Meanwhile, provincial governments, though equipped with larger budgets, operate in a narrower fiscal corridor with limited ability to innovate or diversify.

Reforming the fiscal model

This reality should inform our thinking about intergovernmental reform. If we are serious about delivering services and deepening democracy, then we must properly equip and support local municipalities, both financially and institutionally. We must also stop treating local government as the junior partner in the system.

It’s time we recognise that the real engine of revenue collection, and of delivery, sits right here at local level. After the SA Revenue Service, local government is arguably the next biggest revenue collector.

When residents pay their bills, fix their water meters or apply for planning permission, they aren’t dealing with national or provincial government, they’re engaging with the municipality.

And when things go wrong, it’s not Pretoria or Pietermaritzburg that gets the blame. It’s us.

So perhaps the question we ought to be asking isn’t just: Who collects the money? But rather: Who is closest to the people spending it? DM