1 minute read
9 Sep 2014
1:20 pm

Govt to blame for R4.5 billion of municipal debt

The government owes municipalities R4.5 billion, or nearly five percent of the total R94bn outstanding debt on their books, the department of co-operative governance and traditional affairs told MPs on Tuesday.

Image courtesy Stock.xchnge

Of this, R200 million referred to outstanding rates that dated back to before 2008 when state-owned properties were devolved from the national to the provincial department of public works, the department said.

At the time, the National Treasury asked municipalities to submit all outstanding invoices and received invoices totalling R443m, the department told Parliament’s portfolio committee on co-operative governance.

“To date R243m has been paid,” it said.

The department said it planned to verify and audit the remaining government debt to municipalities in two phases, and the first phase – to be completed by the end of this financial year – would focus mainly on the R200m outstanding in this regard.

Households account for 61 percent of the total debt to municipalities, followed at 21 percent by companies, which collectively owe municipalities R19.7m, according to a briefing to the portfolio committee on local government.

The department said the slower economic growth and unemployment was affecting households’ ability to pay their arrears, but debt collection was also hampered by a lack of political will.

Gauteng and KwaZulu-Natal are by far the worst affected by the debt crisis, with municipalities in the provinces owed respectively R41.1bn and R10.1bn.