Municipal Property Rates Amendment Bill [B12-2009] adoption, Briefing by SALGA on Urbanisation & Migration

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Cooperative Governance and Traditional Affairs

05 October 2009
Chairperson: Mr L Tsenoli (ANC)
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Meeting Summary

The Municipal Property Rates Amendment Bill [B12-2009] made provision for an extension of the period of validity of valuation rolls.  The amendment was requested by the Committee as a result of concerns over the number of municipalities that had failed to comply with the provisions of the Municipal Property Rates Act.  To date, a total of 13 municipalities were affected.  Members of the Committee and representatives from the South African Local Government Association (SALGA) and the Department of Co-operative Governance and Traditional Affairs discussed the related issue of the financial viability of municipalities.  However, these issues were not pertinent to the adoption of the Bill and the Committee did not consider further consultation to be necessary.  The Committee expected a review of the Municipal Rates Act to be conducted at a future date.  The review would include the appropriate consultation processes.

The Committee agreed to the Municipal Property Rates Amendment Bill, without any amendments.

Representatives from SALGA briefed the Committee on the effects of migration and urbanisation on local government.   South Africa followed the global trend of migration from rural to urban areas.  In addition, significant numbers of legal and illegal immigrants from African countries entered the country.  Foreign migrants were largely discounted and the country did not have a national policy on urbanisation and migration in place.  The rapid increase in population resulted in significant challenges to the local, provincial and national Government structures.  Government entities needed to take matters related to urbanisation and migration into account when formulating budgets, integrated development plans and spatial development plans.  The effective utilisation of resources to provide essential public services, the provision of adequate health care and the pressure on existing infrastructure were major concerns.  Government entities lacked accurate data to track the rate of urbanisation and migration and SALGA had commissioned a study on the subject, due to be completed by March 2010.

Members of the Committee commented on the need for a co-ordinated approach in addressing the challenges resulting from urbanisation and migration, the need for a national policy, the potential for abuse of the grant system by members of families living in both rural and urban areas and the need to provide services to foreign migrants.  SALGA was requested to provide input to the Committee on legislative obstacles preventing efficient service delivery.

Meeting report

Adoption of Municipal Property Rates Amendment Bill
Mr Clarence Johnson, a member of the National Executive Council (NEC) of the South African Local Government Association (SALGA), asked to be recused from the formal consideration of the Bill as he did not have a mandate to comment on the Bill.

The Chairperson said that the Committee had proceeded with the legislation under the impression that SALGA had been consulted and had no problem.  The amendment related to the relatively minor issue of an extension of the period of validity of valuation rolls.  The Bill was in response to a request from the Committee as concerns were raised over the number of municipalities that had failed to comply with the legislation.  The Municipal Property Rates Act was expected to be brought before the Committee at a later date and the appropriate consultations would then take place.  This Amendment Bill did not require further consultation.

Mr P Smith (ANC) hoped that the information provided and which underpinned the extension was correct.  A list of 13 municipalities which had not complied with the requirements of valuation was provided to the Committee.  He requested the assurance that only the 13 municipalities listed were affected.

Mr Mzilikazi Manyike, Executive Manager in the Department of Co-operative Governance and Traditional Affairs (DCOGTA) responded that the information provided was based on the Department’s interaction with the provinces.  When the issue first arose in Parliament, the number of municipalities affected was 15 but two municipalities had since complied.  The Bill made no reference to a specific number of municipalities and would be applicable to any number.

The Chairperson commented that it was important for the Committee to know the extent of non-compliance by the municipalities.

Ms M Wenger (DA), commented that she accepted the Department's explanation but asked why the Committee was advised during a previous meeting that the number of affected municipalities was 17.

Ms Veronica Mafoko, Senior Manager, DCOGTA, conceded that the number had been 17 at that time.  The information available tended to be fluid and changed in accordance with information received by the Department from time to time.  The current figure of 13 was not necessarily fixed but gave the Department an indication of the need to protect municipalities by extending the validity period.  Any additional municipalities would be covered by the provision made in the Bill.

Mr Johnson remarked that he was tempted to participate in the meeting even though he did not have a mandate.  He was in possession of additional information that differed from the view of National Treasury.  He was of the opinion that property rates should be collected by the South African Revenue Service (SARS) and not by municipalities.  He felt that National Treasury should be present at the discussion.

The Chairperson invited Mr Johnson to address the Committee if he considered his remarks to be pertinent to the matter under discussion.

Mr Johnson responded that he had not prepared for a discussion on this particular topic and had not brought the relevant documentation with him.  He understood that his contribution to the meeting was limited to the briefing on urbanisation.  The Director General of Inter-Governmental Relations recently provided updated information to SALGA regarding the matter of the financial viability of municipalities.  The information needed to be verified by National Treasury as property rates income was the only secured income source of municipalities and had a direct impact on financial viability.

Mr Manyike confirmed that the Department had consulted with National Treasury on the Bill. The issues raised by SALGA had been dealt with through the Cabinet process and recommendations had been made for the Department to deal with these issues when the Municipal Property Rates Act was reviewed.  The concerns raised by National Treasury in respect of this particular Bill related to the drafting of the clauses rather than the substance of the content.  The Office of the Chief State Law Adviser had attended to the concerns raised by National Treasury.

The Chairperson accepted Mr Johnson’s request to be recused from the adoption of the Bill.  The Committee was satisfied that the adoption of the Bill was not compromised by the issue of the financial viability of municipalities.

The Chairperson read the motion of desirability.  The Committee agreed to the Municipal Property Rates Amendment Bill, without amendments.

The Chairperson read the report of the Portfolio Committee on Co-operative Governance and Traditional Affairs on the Municipal Property Rates Amendment Bill. The report had to be amended to reflect that the Committee had agreed to the Bill without amendments.

Briefing by SALGA on the effects of migration and urbanisation on local government

The Chairperson expressed concern over the lack of consideration that had been given to the impact of migration and urbanisation on the services provided by provincial and local government organisations.  Migration and urbanisation were international phenomena and South Africa followed the international trends.

In his introduction to the briefing, Mr Johnson gave an outline of the challenges resulting from migration within sub-Saharan Africa.  The migration of people from neighbouring countries and from rural areas to urban areas within the country was a key factor in the planning processes of municipalities.  Municipalities were currently engaged in formulating integrated development plans and spatial development frameworks.  Factors such as population density and the cultural aspects of urban lifestyles needed to be taken into consideration.  The increased number of people migrating to South African cities had a major impact on Government resources and the provision of services.  In particular, health services such as disease control and combating the spread of tuberculosis, HIV and AIDS were affected.  In future, the allocation of Government resources would be determined by the movement of the poor to areas occupied by wealthier citizens.  SALGA was engaged in discussions with various national and international organisations and had commissioned studies on the impact of urbanisation, climate change and other related matters that impacted on governmental planning processes.

Mr Ashraf Adam (Project Manager; SALGA) briefed the Committee on the impact of urbanisation and migration on local government (see attached document). He referred to the establishment of the National Planning Commission and the development of a national policy on urbanisation.

The presentation included definitions of migration and urbanisation and details of a study on migration commissioned by SALGA.  The briefing was illustrated with maps indicating the concentration of key spatial trends, migration patterns, urbanisation of the youth and poverty and income inequality.  The major service delivery challenges included access to public services, the need for housing, the allocation of resources, the upgrading of settlements and the establishment of new settlements, the availability of land, the responsibility of the various Government entities and the inability to determine accurate data.

The major conclusions reached included the fact that 75% of the population of South Africa currently lived in urban areas, rural towns were unable to afford the services demanded by an increasing population, two-thirds of people living below the poverty line lived in urban areas and were unable to afford municipal services, cities were under pressure to deliver services to a burgeoning population, existing infrastructure was inadequate and the contribution of foreign migrants were largely discounted.

The Chairperson commented that the presentation highlighted serious implications about the work that needed to be done by the country.

Mr P Smith (IFP) commented that migration and urbanisation had huge implications for Government policy.  What struck him was the segmented approach to dealing with this issue since it affected most Government Departments, not just the Departments of Housing and Social Development.  He doubted that such a segmented approach would result in much progress being made. Government would need to find innovative ways of planning and might benefit from the experience gained in Turkey and other countries, where housing projects made better use of available space and where there were no slums. Spatial policy in South Africa appeared to be horizontal and this practice was not supported by the high cost of dwelling units per unit of space.

Mr Adam cautioned that the successes in other parts of the world were achieved within a particular context, for example the reduced conditions of democracy in Malaysia, Singapore and all the other countries that were held up as beacons of urban planning and development. The Committee needed to be aware of the context within which these countries were able to deal with urban development.

Mr Smith asked if there had been a green or white paper on migration issues and whether there had been an attempt to see into the future in terms of Government planning and expenditure.

Mr W Doman (DA) challenged the assertion that migrants had different requirements for municipal services. Migrants needed the same services as South African citizens.  He asked if the needs of migrants were not taken into consideration because he saw no difference in the needs of migrants and what other people needed.

Mr Doman asked about the trend to establish new families in urban areas when the whole family did not migrate from the rural areas.  The trend created a challenge as Government had to provide services for both families.  He asked if any studies had been done on this issue and if there was a way to ensure that people would not qualify for grants in both the urban and rural areas.  The abuse of the grant system in this manner made it impossible for Government to fulfil all the needs of people, as illustrated by the riots and demands for services.

Mr Adam questioned the value in a democracy of providing free services. This practice created unnecessary backlogs and resulted in tensions amongst communities and created conditions for service delivery protests. The housing problem would never be solved and Government would never address the challenge of urbanisation. Urbanisation was not about housing or free basic services. It was about creating opportunities for people. The issue was whether one wanted to live in a secure and safe environment or whether one simply wanted a free house and free basic services. People with skills would rather live in a secure environment and utilise their skills than to get a free house. These were the challenges that needed to be addressed. Even in democracies such as India and Brazil, the issue of free housing and free basic services was not always on the agenda. In Brazil, people had to make a contribution towards their own housing.

The Chairperson commented that this matter was at the heart of co-operative governance. Many of the problems that municipal councillors were being blamed for were the responsibility of the Provincial and National Governments.  He felt that SALGA had not been bold enough to say so when they referred to the “devolution of functions”.  SALGA did not specify which functions were referred to, for example the provision of housing or transport.  He urged SALGA to be bold to put the issues on the agenda.  He reminded SALGA of an earlier undertaking to provide the Committee with input on legislative hindrances to service delivery.

Mr Johnson responded that SALGA had engaged in discussions on the legislative obstacles and the constraints faced by South Africa in terms of service delivery and had attended a Lekgotla.  SALGA was considering approaching tertiary institutions and think-tanks on these issues.  Work was being done on zone planning and reducing the turnaround time for finalising building projects. In certain provinces the turnaround time was three years whilst in others it was 12 months. There was a lack of capacity in certain provinces in addition to the legislative aspect which prevented service delivery.  He undertook to provide the Committee with input on the legislative hindrances to service delivery in the near future.

The Chairperson mentioned that The Department of Home Affairs had made some interesting comments on migration. South Africa had not taken advantage of the inflow of migrants and refugees as was done in countries.  Ireland had introduced a passport for refugees that allowed access to essential services. South Africa did not have such initiatives in place.  In Johannesburg and Cape Town refugees and foreign visitors were treated in an unfriendly manner. He recalled meeting a girl from Soweto in Ireland where she worked as a court interpreter.  South Africans living in Ireland were encouraged to speak in their own language.  He felt that more could be done at municipal level to address the challenges that were faced. South Africa was a signatory to many treaties and international agreements that required the country to undertake certain obligations.

Mr Johnson responded that South African cities marketed themselves in various ways to attract investment and skills. The question of how cities projected themselves was a key element of urbanisation within the global community in terms of attracting investment and encouraging development of those areas. Municipalities hosted annual events to welcome new residents and to introduce them to the business community.

The Chairperson commented that the definition of migrants in the presentation excluded persons from the neighbouring countries of Lesotho, Botswana and Mozambique.  These migrants often spoke South African languages and were on the blind side of the stigma attached to other foreign nationals.  Many resided in the border towns. The border towns faced many challenges regarding service delivery and needed support to deal with health related issues and crime. Strategies for preventing a recurrence of xenophobic incidents were currently being driven by only a few municipalities and there was no general strategy to make people feel welcome in South African cities.

The Chairperson was concerned over the population growth experienced by the secondary cities as this trend would have significant budgetary implications.  Population growth would exceed the budgetary capacity for service delivery. This issue needed to be considered by the municipal cluster systems.   The Committee had to address the implications of urbanisation and migration in the oversight over the Department.  In future, the Committee had to do more to highlight the issue and ensure it remained on the agenda.  The issue of illegal immigrants had huge implications for disaster management planning and the successful implementation of disaster management policies as these persons were often the most affected by any disasters.

Mr Johnson explained that in certain countries, citizens who directly derived benefits were clustered together under departments whilst all other persons were dealt with by sub-directorates. If there was a need in terms of legislative or strategic issues (such as a national or infrastructure development strategy which was not available) consideration needed to be given to those areas in the context of urbanisation. Services had to be equitably distributed without neglecting the rural areas.  The influx of people into the cities would increase the pressure on rural municipalities because they would become dysfunctional and unable to provide the high-cost infrastructure to sustain the residents. This was the case in Limpopo, where the flow of people to Gauteng was at such a rapid rate that infrastructure could not be developed to satisfy demand.  A similar situation existed in the Eastern Cape, KwaZulu Natal and Mpumalanga provinces.

The meeting was adjourned


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