Freedom Front Plus
Freedom Front Plus

Basic economic principles are important in curbing the decline of municipalities

(Parliamentary budget vote debate: Cooperative Governance and Traditional Affairs)

The current decline of municipalities can only be curbed if the ANC government stops practising populist, ideologically driven slogan-politics in local governments.

Basic economic principles dictate that municipalities ought to focus on creating business-friendly environments to attract investments, specifically from small and medium-sized enterprises (SMEs).

It includes imposing favourable rates and taxes, and properly maintaining and repairing infrastructure.

That is the only way to stimulate job creation and economic growth in local economies. The custom of the ANC in local governments to simply increase rates and taxes to make up financial deficits stifles local businesses and leads to disinvestment.

It creates a downward spiral of an ever-shrinking tax base, unemployment, poverty and the general decline of towns and cities.

Add to that the poor financial management, lawlessness, cadre deployment, corruption and poor leadership that characterise most ANC-controlled municipalities and it becomes abundantly clear that the ANC government is only serving its own interests.

This is also evident in the fact that most government departments are billions of rand in arrears with the payment of municipal services accounts.

The explanation that Deputy President David Mabuza offered in December last year in response to a parliamentary question by the FF Plus, i.e., that the situation is caused by the issuing of incorrect accounts, should also serve as a serious warning for municipalities.

All consumers of municipal services must be treated equally.

Different rules cannot apply to different consumers. In light if the Deputy President's stance, government must not be surprised if communities decide to follow the government departments' example.

Municipalities must ensure that accounts are correctly issued to residents.

If communities do decide to follow the abovementioned example by the Deputy President – to withhold payment to municipalities until their accounts are correctly issued – it will have a tremendously negative impact on the cash flow of most ANC-controlled municipalities.

Government must set a good example by making sure that national departments promptly pay their municipal accounts within thirty days to support local municipalities and economies.




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