COGTA Budget: Committee Report

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Cooperative Governance and Traditional Affairs

08 May 2018
Chairperson: Mr M Mdakane ANC
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Meeting Summary

The Committee added new observations and recommendations to the report. Firstly, the Committee observed the Department of Cooperative Governance and Traditional Affairs’ slow pace of processing legislation to Parliament such as experienced with the Local Government Amendment Bill, ENCA Bill, and Traditional leadership and Khoi- San Bill. It recommended that the Department improve its support for legislative processes. Secondly, the Committee observed the ongoing debt crisis faced by municipalities, which has resulted in municipalities owning debt to Eskom and Water Boards. The Committee recommended that municipalities, Eskom and National Treasury meet to establish which debt was recoverable and which was not. The Committee recommended that these parties should establish a payment plan for the recoverable debt.

The Committee observed that 112 out of 257 municipalities had underfunded budgets. Whilst Members generally agreed that these municipalities were in need of financial assistance, there was contestation on whether sections 1395 and 1397 of the South African Constitution should be evoked to address the financial crisis faced by the affected municipalities. The Committee observed the vacancies in the Municipal Infrastructure Support Agent and recommended that these posts be filled. It was proposed that the Department of Cooperative Governance and Traditional Affairs assist the Commission for the Protection of Rights for Cultural, Religious, and Linguistic Communities with its budget for the National Consultative Conference.

It was proposed that Members of the Executive Councils from Northern Cape, North West, KwaZulu-Natal and Limpopo come before the Committee on 22 May to present the problems faced by municipalities and the Provinces proposals to address the problems.

Meeting report

The Chairperson informed Members of the Committee that it was Local Government Week and that Members were invited to attend the proceedings and sessions of Local Government Week.

On page 7, Mr N Masondo (ANC) sought clarification on the analysis of programme two, Regional and Urban Development and Legislative Support, as there was conflicting information on its progress.

Mr K Mileham (DA) replied that the overall performance of programme two had gone down but Sub-Programme 1: Management: Regional and Urban Development and Legislative Support had increased by 114%.

On page 20, Mr Mileham asked how the Committee could say that its second recommendation has been resolved when some municipalities’ electricity supply had been cut off. Saying the issue had been resolved provides that the issue has gone away, which is misleading. 

The Chairperson said the issue is resolved in one month and continues to the next month as the solution is on-going.

Mr Mileham replied that the report should say that the matter is ongoing rather than saying the issue has been resolved. He proposed that the Committee replace the recommendation with “Ongoing interactions are occurring with Eskom, National Treasury and municipalities”. Further negotiations required to finalise the situation"

Ms B Maluleke (ANC) replied that the last section of Mr Mileham’s proposed change is important but cannot be said in this particular report.

Mr Mileham agreed with Ms Maluleke but said that the first section should be included in the report.

The Chairperson noted Ms Maluleke's comment and said the ongoing engagements with the three parties would eventually lead to the matter being resolved.

On page 22, the Chairperson said that the recommendation involving the National Treasury had been resolved.

Ms Maluleke replied that the Committee report should not say that the recommendation has been resolved. She proposed that the report should state that the action required by the National Treasury has been done and that the issue is still ongoing.

The Chairperson referred to the Committee’s recommendation of hosting a workshop for the Commission for the Protection of Rights for Cultural, Religious, and Linguistic Communities (CRL Rights Commission) and other relevant Portfolio Committees and asked Mr Mileham if the workshop has happened.

Mr Mileham replied that the workshop did happen but the table report for the workshop was outstanding.

The Chairperson asked to which Amendment Bills the Committee's recommendation referred.

Mr Mileham said recommendation referred to amendments of the Municipal Structures Act, Municipal Demarcation Act and the Municipal systems Act.

The Chairperson replied that the Committee's Report is a public document, which is meant for all people in society and not just Committee Members. The Report should clearly state which Amendment Bills are being addressed.

Mr Mileham proposed rephrasing the sentence to “Briefing completed. Bills to be processed include the following..."

On recommendation 6.7, Mr Masondo asked if [ 18:06] ( I get the Chairperson going on to 6.8, 6.9. and further – then quite soft)

Ms Maluleke asked whether the Department of Cooperative Governance and Traditional Affairs presented the outline or progress in its Annual Performance Plan to the Committee. She proposed that the wording of this recommendation be changed. 

The Chairperson asked the Committee Members if they had any additional recommendations or observations to add to the report.

Mr Mileham made three observations and recommendations.
Firstly, he observed the slow pace of legislation through the Department and gave examples of the Local Government Amendment Bill, Traditional and Khoi-San Bill. The ENCA Bill has not been processed, four years after it was drafted. He recommended that the Department look at its legislative support structure and process. The Department needs to speed these processes up in order to get legislation to Parliament.

Secondly, he observed that there has been a lack of real progress towards addressing the municipality debts crisis to Eskom and Water Boards. The Committee should recommend that Eskom, National Treasury and COGTA meet and finalise which debt is recoverable and which debt is not recoverable. The parties should write off the irrecoverable debt and work out a plan to get the debt owing to Eskom and the Water Boards.

He added that the Minister of Finance, Mr Nhlanhla Nene, recently said that 112 municipalities out of 257 did not pass the approved budget. He recommended that the Department intervene in terms of sections 1395 and 1397 of the Constitution. The Department needs to provide financial support and assistance to the municipalities in terms of section 154 of the Constitution.

Mr N Khubisa (NFP) noted Mr Mileham's observation on the municipality debt crisis and his proposed recommendations. While he agreed that the issue must be addressed, this was in the purview of the Members of the Executive Council. He raised the concern that the Committee did not have sufficient information on the matter as it only has Minister Nene's statement. The Committee did not have enough information to inform Members on what decision to make or which Constitutional provisions should be used to intervene.  To make such an interface, the Committee would need information on which municipalities did not have their budgets approved as the Committee's recommendations have far reaching implications.

Mr Khubisa added that some Provincial governments could be addressing this problem on their own or affected municipalities could be receiving financial support or assistance from other Provincial governments. It would be important to assess which municipalities require financial support.

Mr Mileham replied that in the Parliamentary question he submitted; question 871, there was a comprehension list of all 112 municipalities, which passed their budgets with underfunded budgets. These municipalities' expenditure was greater than their revenue. The Committee needed to provide the 112 municipalities with support so that they do not plan underfunded budgets as municipalities are to submit their budgets by 1 June.

He replied that section 1395 of the Constitution provided that the Provincial government is to intervene when municipalities are in financial crisis. Section 1397 states that if a Province cannot or does not intervene, the National Executive must intervene. The responsibility for this matter does not lie with the Minister but the Cabinet. He added that out of the 112 municipalities, only 14 have financial recovery plans.

Mr Mthethwa (ANC) said he was not satisfied with the missing vacancies in Municipal Infrastructure Support Agent (MISA) as mentioned in the Report.

Mr Masondo said on the question of intervention there is a need for a report that highlights the issues of the municipal debt crisis and to establish what the provinces are doing to address the matter.

The Chairperson went over the areas raised by the Committee Members for the observations and recommendations. He said the pace of the Department’s legislative process is slow as it takes too long to formulate and send Bills to Parliament. The second area discussed was that municipalities face financial problems. The Committee would need to meet the municipalities and Member of Executive Council to make an informed decision over the matter. He said the Committee's proposed observation is that there are 112 municipalities with budgets that are underfunded. Its recommendation would be that municipalities generate budgets which are adequate.

He added that the MISA issue raised by Mr Mthethwa was important. He said that the Committee's proposed recommendation is that MISA should either appoint and confirm the current acting Chief Executive Officer or appoint a new person.

Mr X Ngwezi (IFP) said the amended report should be circulated to Members before the meeting.

Mr Mileham said the Committee had discussed the CLR Commission’s Annual Performance Plan (APP) budget for its National Consultative Conference. He proposed that the Committee should recommend that the Department seriously considers funding the CLR's National Consultative Conference.

The Chairperson said Committee would have to find a better way of phrasing this recommendation as the Department could say it does not have the financial means to fund the Conference as the Department may not be interested in the CLR's Conference.

Mr Mileham said that under the CLR Act, the Minister appoints the board of the Commission. The CLR Commission is a Chapter 9 Institution and goes through Parliamentary processes. He proposed that the Committee CLR Act be amended and that the appointment process be done through Parliament and not the Minister.

The Chairperson said the last recommendation should be raised with Minister Zweli Mkhize. Members of the Executive Councils of North West, Northern Cape, Limpopo and KwaZulu-Natal should come before the Committee on 22 May to present their problem areas and proposals to address these issues, particularly those affecting municipalities.

The Chairperson asked Mr Mileham to explain the email on the International Conference on Municipal Departments {42:.19} (don’t get it)

Mr Mileham said that International Conference would be in the national interest given the state of country's municipalities. The Conference would be held in Detroit.

The Chairperson said the Committee would consider some officials going, given there is money available to fund the trip.

Adoption of deletions and insertions. (The Report was adopted with deletions and insertions?)

Meeting adjourned

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