Address by Deputy Minister Parks Tau during the National Assembly Virtual Budget Vote Debate

Thank you sincerely for the platform to address the National Assembly during this Budget Debate.

Fellow South Africans,
Overnight we heard the news of the passing of Andrew Mlangeni. A former member of this assembly, the last remaining Rivonia Trialist, a recipient of Presidential Order for Meritorious Service: Gold from President Nelson Mandela in 1999, and a Freeman of the City of Johannesburg. His passing signifies an end to a generation of freedom fighters.

Last year at the Budget Vote, we noted that local government is confronted mainly with challenges of governance, financial management and systemic issues around powers and functions.

In her presentation of the 2020 to 2021 Adjustment Budget address, the Honourable Minister Nkosazana Dlamini-Zuma, highlighted these challenges amongst others, the adverse findings of the Auditor-General and the interventions required. The Minister’s leadership in this regard has been instrumental.

CoGTA continues to exercise its mandatory functions in relation to the implementation of Section 139 of the Constitution. As we have been at pains to emphasize, the use of Section 139 is an instrument of last resort. Rather, we should place greater emphasis on Section 154 through the district development model as a key mechanism for support to local government.

We note that the North West province has some of the highest numbers of Section 139 interventions. In this regard, we worked very closely with the late MEC for CoGTA, Honourable Gordon Kegakilwe, in identifying the source of the challenges and jointly developing the responses. Thus, his untimely death leaves a huge void in that effort.

As the Cooperative Governance Department, it is my contention that there is hope in action to ensure that objectives and targets are delivered, specifically:

Getting municipalities to be accountable and improve governance,
Boldly confronting poor administrative and financial mismanagement, and
To respond to the systemic and functional design issues that affect local government

We set bold targets in the Medium-Term Strategic Framework (MTSF), CoGTA’s Strategic Plan and the Annual Performance Plan (APP) which focus on policy, legislative, institutional, finance and regulatory interventions. Under the leadership of Honorable Chairperson Muthambi, it has been a key platform for engagement, oversight and accountability. We have refined our strategic agenda, rigorously assessed our performance and we are now focusing on fast-tracking our high-impact programmes.

Honourable Members,

Hope in action is evident in our unwavering resolution of administrative issues of the Community Works Programme (CWP), a Programme with a twofold goal, that is, first, target young people who are not education, employment or training (NEETs), and second, support the establishment of cooperatives and social businesses in local municipal economies.

In the current cycle, as per the cabinet decision, we are finalizing the revised CWP model to enhance its effectiveness. As we implement this programme, allow me to pay my last respects to CoGTA’s Chief Director, Mr. George Seitisho, who recently passed away.

Ladies and Gentlemen,

Hope in action is apparent in the development of the Smart Cities Framework for South Africa. Under this Framework, work is underway to roll out a flagship project of smart meters and grids, which are a key enablement for smart electricity.

As we reimagine a new energy future for municipalities, in line with their Constitutional mandate as the reticulation agents of electricity. The objective is to create a market-place for a diverse energy mix, whilst also providing opportunities for energy entrepreneurs.

Together with sister departments, SALGA and partners, we have worked closely under the guidance of the Deputy President Mabuza and the ESKOM Political Task Team to address some of the inherent challenges that confront electricity distribution.

As a sector our task is:

To comprehensively review the revenue system of local government,
To proactively resolve debt owed to ESKOM,
Bring together all role-players and social partners to resolve the more than R185 billion that is owed to municipalities
To appoint an electricity ombudsman that regulates the relationship between the supplier and user
To undertake a comprehensive communications campaign that improves relations between local governments and society. This can only be done through a strong social compact
Lastly, we need to reconfigure our energy distribution sector, so that we address the triple challenge of; climate change, energy efficiency and unreliable supply.

Honourable Members,

An all-of-government-approach is central to remodelling a viable and sustainable, financial architecture for local government.

In this period of the “new normal”, social compacting with the private sector, non-governmental organisations (NGOs), financing institutions and the international community is indispensable. It is important to increase financing for municipal infrastructure through a range of instruments; including blended financing instruments, pooled financing and an increase in private sector participation in infrastructure projects.

In response to the Covid-19 Pandemic, we have already reprioritized the budget as part of the announcement made by President Ramaphosa of additional funding of R20-billion for municipalities. From this total amount, the following allocations will be made:

R11-billion in additions through the Local Government Equitable Share which has been provisioned by National Treasury; and
The remaining R9,4-billion is obtained through the repurposing of the existing Division of Revenue Act grants, which are already allocated to municipalities.

Specifically, the 9,4-billion is broken down into the following grant allocations:

Municipal Infrastructure (Direct Conditional grants) – 4,4 billion,
Urban Settlements Development (Direct Conditional grants) – 2,2 billion,
Public Transport Network (Direct Conditional grants) – 1 billion,
Water Services Infrastructure (Direct Conditional grants) – 689 million
Regional Bulk Infrastructure (Indirect Conditional grants) – 409 million, and
Regional Bulk Infrastructure (Direct Conditional grants) – 401 million,
Integrated Urban Development (Direct Conditional grants)- 190 million.

Furthermore, we have reallocated funds within existing Vote 3 for:
Municipal Infrastructure Grant: 4,4 billion.
Community Works Programme: 1,3 billion
Integrated Urban Development Grant: 189 million

Honourable Speaker,

Hope in action is evident with our continued work with the Municipal Infrastructure Support Agent (MISA). This ongoing work requires transforming and capacitating MISA, to provide tailor-made support to municipalities, and also to:

Propose Financial Solutions to fund Municipal Infrastructure,
Explore the possibility of a Municipal Bank,
Set up and implement framework contracts in line with the standards for infrastructure procurement for use by municipalities,
Identifying project pipelines, for accessing climate finance mechanisms

Honourable Members,

It is indeed a truism that COVID-19 is both a crisis and a portal to opportunities. CoGTA is making steady progress to meet the outcomes from the Annual Performance Plan.

Our work with partner municipalities, SALGA, Traditional Leaders and Traditional Councils, has already begun to yield results:

Through MISA, and the Ntirisano Construction Fund we have procured a total of 115 boreholes to augment water supply in impoverished areas.
Finalised the rehabilitation of the Lejwenang Water Pump Stations in Maluti-a-Phofung Local Municipality
Finalised the construction of water supply infrastructure at the Enyathi and Bhokwe villages in Abaqulusi
Begun the important construction and refurbishment of eMondlo Wastewater and Water Works.

Honourable Members, Deputy Minister: Bapela continues to exercise decisive leadership in bringing together the COGTA family and traditional leaders to implement the Agrarian Revolution Programme. The Department of Cooperative Governance through the Community Works Programme made available an amount of R100 Million to Fourteen (14) Traditional Communities who have benefitted from the implementation of this programme. Traditional Leaders have set aside one million hectares of land and will identify an additional six million hectares of communal land for this programme.

In conclusion, as long as we continue our multi-faceted work in service of the people of South Africa, we will indeed pay homage to those Honorable members who have lost their lives due to Covid-19. Allow me to dedicate this speech to them.

This week we will be laying to rest my comrade, Honourable Member Mapiti Matsena, who died at the hands of criminals, may he too rest in peace. Nothing is sadder than death.

Hope in action for local government is an on-going process to ensure, ultimately, that indeed “today is better than yesterday and that tomorrow will be better than today”.

I thank you.