SAMWU criticises Treasury’s decision on municipal funding and salary delays
The National Treasury’s recent withdrawal of withholding equitable shares from poor-performing municipalities came after extensive damage was already done, leaving many municipalities unable to pay workers’ salaries in July.
This was according to the South African Municipal Workers’ Union (SAMWU), which represents over 150,000 municipality employees, in reaction to Finance Minister Enoch Godongwana’s announcement that R7.1 billion withheld from 49 municipalities early this month was released to them on Friday.
The affected municipalities were targeted because of their poor service delivery and failure to control their finances.
After the Treasury had announced the temporary suspension of the fund, some of the affected municipalities expressed dissatisfaction, saying that this decision was despite them having made undertakings to work on their challenges.
Announcing the withdrawal of the suspension of the allocation to the affected municipalities on Tuesday, Godongwana said his change of heart did not mean that the affected municipalities had satisfied the requirements of the Municipal Finance Management Act (MFMA), the Municipal Regulations on Financial Misconduct Procedures and Criminal Proceedings.
Although SAMWU welcomed Godongwana’s withdrawal of the suspension of the fund, it said: “We cannot simply move on as though nothing happened.”
Its general secretary, Dumisane Magagula, described Godongwana’s initial decision as reckless and ill-conceived, saying it placed service delivery in municipalities already experiencing severe financial difficulties at risk of collapse.
Most municipalities, like Impendle, which is one of the smallest rural municipalities in KwaZulu-Natal Midlands, do not have rate collection and are highly dependent on grants to pay employees’ salaries.
“There was simply no logic in taking municipalities already facing severe financial difficulties, withholding an important source of their revenue, and then expecting their financial position and service delivery capacity to somehow improve,” said Magagula on Tuesday.
He said that on the day of the suspension of the grant allocation, SAMWU warned that municipal workers would not receive salaries, and therefore would be able to pay creditors.
Magagula said despite the union’s warning, the Treasury said the withholding would have no impact on service delivery.
“The experience of the past few weeks has demonstrated how dangerously misplaced that confidence was.
“Municipal workers across several provinces have either not received their July salaries, received them late, or faced uncertainty about when they would be paid.
“In some municipalities, workers were already owed salaries from June, and this happened at precisely the time when municipal workers were also supposed to receive their salary increases together with their July salaries.”
He said that despite not receiving their salaries, the workers continued to perform their normal day-to-day duties.
“Yet when payday came, many were left with nothing. Debit orders bounced, workers could not meet their bond and rental payments, families struggled to buy food, parents had to worry about transporting their children to school, and workers faced penalties and the possibility of damage to their credit records because of a decision over which they had absolutely no control.”
Magagula said the union cannot applaud Treasury for reinstating the fund, although this would bring relief to workers.
“It (reinstatement) cannot erase the hardship unnecessarily inflicted on thousands of municipal workers and their families,” he said.
SAMWU maintains that the initial decision was an unacceptable form of collective punishment for municipal workers who did not adopt unfunded budgets, did not authorise irregular, fruitless, and wasteful expenditure, and who had nothing to do with their employers’ failure to implement consequence management against municipal managers and senior officials for poor decision-making.
“Yet, when National Treasury decided to impose consequences on municipalities, it was ordinary workers and communities who were made to pay.
“If National Treasury was genuinely concerned about the financial health and governance of municipalities, there were other mechanisms available to government.
“Treasury could and should have worked with the Department of Cooperative Governance and Traditional Affairs (CoGTA), provincial governments, and municipalities on targeted interventions, including the constitutional mechanisms available under Section 139 of the Constitution,” he said.
Godongwana said that despite reinstating the fund, municipalities have been assessed and found to be continuing with their weaknesses in financial management, which include unauthorised, irregular, fruitless, and wasteful expenditure (UIFWE), financial misconduct investigations, disciplinary processes, consequence management, and municipal financial governance.
He said he decided to reverse his decision to avoid having an adverse short- to medium-term effect on the delivery of basic municipal services.
He said the equitable shares, which he had already withheld for 30 days, is an important source of funding for basic services, particularly services provided to poor households.
“National Treasury must therefore balance its constitutional responsibility to enforce financial management requirements with the need to avoid communities carrying the immediate consequences of failures by municipal institutions and officials.
“The release must accordingly be understood as a conditional release, intended to protect basic service delivery while requiring affected municipalities to correct the serious weaknesses identified through the Section 216(2) process,” he said.
However, the poor-performing municipalities are not off the hook, as Godongwana said similar action would be implemented in December, unless the municipalities demonstrate improvement in their performance between September 30 and November 30.
CoGTA Chairperson Zweli Mkhize said that in assisting municipalities to comply, CoGTA would bring in the South African Local Government Association, premiers, provincial governments, MECs responsible for finance and cooperative governance, provincial treasuries, and municipalities.
Standing Committee on Public Accounts Chairperson Songezo Zibi commended Godongwana for fighting against irregular expenditures and unaffordable and non-essential expenditure.
“This undertaking will go a long way towards arresting persistent municipal dysfunction,” he said.
