Division of Revenue Bill sparks debate on debt, disaster relief and inequality

Parliament debated the Division of Revenue Amendment Bill, focusing on debt management, disaster funding, and equitable resource allocation to address South Africa’s pressing challenges.

The National Assembly gathered on Tuesday afternoon to consider a report of the Standing Committee on Appropriations on the amendment bill.

Minister of Finance Enoch Godongwana tabled it during the 2024 Medium-Term Budget Policy Statement.

Division of Revenue Amendment Bill

The bill provides for unforeseen and unavoidable expenditure; appropriation of monies already announced during the tabling of the annual budget; and the shifting of funds between and within votes where a function is transferred.

The chairperson of the Standing Committee on Appropriations, Mmusi Maimane, emphasised the need for tough choices to avoid future repercussions.

Maimane proposed a better strategy for managing debt, noting that over R1 billion is spent daily and that debt could peak at 75% of GDP.

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He also urged investment in Sars for better collection and the digitalisation of the state using blockchain technology to avoid corruption.

The Build One South Africa (Bosa) leader called for tougher policy adjustments, including a review of the white paper on municipalities, and for municipalities to become economic engines.

“The reality is municipalities cannot meet their bills, and ultimately, they will owe Eskom. Eskom will come knocking here for more bailouts, and we will end up in this cycle where we bail out state-owned enterprises (SOEs) and fail to meet our objectives,” he said.

‘Municipalities cannot meet their bills’

Maimane urged the government to stop bailing out SOEs due to the lack of revenue to sustain them and focus on building better middle classes to increase revenue and meet objectives.

“May our choices reflect our hopes rather than our fears; let’s make tough choices today,” he said.

Regarding the shifting of funds between disaster grants following the floods that affected parts of the country, ANC member of parliament (MP) Martha Bartlett said it is important to ensure local and provincial governments secure disaster grant funding to respond timely to them.

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“As a country, we need to continue to develop our… financial capacity to ensure timely funding and preparedness to effectively respond to climate change disasters,” she said.

Bartlett emphasised the importance of disaster risk funding and grand funding for municipalities.

uMkhonto weSizwe (MK Party) MP Wesley Douglas criticised the bill for failing to address deep inequalities in South Africa and maintaining the status quo rather than transforming lives.

Maintaining status quo

Douglas pointed out that provinces with higher poverty and unemployment, such as the Eastern Cape, Limpopo, and KwaZulu-Natal, receive inadequate allocations, making it impossible for municipalities to generate revenue. Thus, leading to persistent service delivery failures and crumbling infrastructure.

Douglas said the MK rejected the bill because it does not address systematic issues and is not pro-poor.

Democratic Alliance MP Dr Mark Burke criticised the bill, highlighting the inadequacy of funds for municipalities and the broader issue of corruption. Burke argued that the pot of revenue is too small to divide.

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EFF MP Mogamad Paulsen criticised the bill for failing to address service delivery issues effectively due to its “outdated” framework.

Paulsen said that the bill cannot resolve issues like indigent households lacking basic services or the financial viability of many municipalities. He highlighted four metros—Johannesburg, Tshwane, eThekwini, and Cape Town—that dominate municipal revenue, while others rely heavily on equitable shares.

“In the next 10 years or so, the majority of these municipalities will completely collapse with zero operations… We don’t need cosmetic changes,” he said.

‘We don’t need cosmetic changes’

IFP MP Nhlanhla Hadebe emphasised the need for increased provincial autonomy and equitable funding in the bill.

He highlighted the underresourced provinces, particularly in rural areas, which have deteriorating infrastructure and insufficient provisions for essential services.

Hadebe called for urgent funding for rural hospitals and schools, advocating for greater transparency and accountability in government spending to prevent misuse.

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