The National Treasury’s temporary withholding of the transfer of the July equitable share funds to 69 municipalities came under intense scrutiny in Parliament on Friday, where questions were raised about the lawfulness of the intervention.
On July 7, the National Treasury announced the withholding decision, which it said had been taken in terms of Section 216(2) of the Constitution, read with Section 38 of the Local Government: Municipal Finance Management Act 56 of 2003.
During a joint meeting of the Portfolio Committee on Cooperative Governance and Traditional Affairs, the Standing Committee on Finance, the Standing Committee on Appropriations, the Standing Committee on Public Accounts, and the Standing Committee on the Auditor-General, Finance Minister Enoch Godongwana defended the intervention.
Arguing that it was a corrective rather than punitive measure, Godongwana said the decision to invoke Section 216(2) had been taken as a “last resort” to halt the financial deterioration in municipalities, and only after other supportive actions had been taken.
The intervention, he reiterated, was designed to address the passing of unfunded budgets, the non-payment of bulk suppliers, including water boards and Eskom, ongoing unauthorised, irregular, fruitless and wasteful expenditure, and a failure of the councils to implement consequence management.
