Culture of non-payment threatens stability of municipal finances- Treasury

CAPE TOWN – National Treasury has flagged the non-payment for public services as a threat to the financial stability of municipalities.
Treasury officials briefed members of the standing committee on appropriations on Thursday, on the 2018 division of revenue bill, where they gave an update on local government debt.
As of December 31 2017, municipalities owed Eskom R16.2-billion and owed water boards R7.3-billion, the oversight committee heard.
The overall creditors number is R41.2-billion, Jan Hattingh, chief director of local government budget analysis at Treasury said.
“The culture of non-payment threatens municipal financial sustainability,” Hattingh said.
Hattingh referred to the former finance minister’s budget speech, where he highlighted that the director general will be issuing a directive to all government departments and public institutions to pay suppliers on time, or be charged with financial misconduct.
He also stressed that when suppliers, usually small and medium enterprises, are not paid within 30 days, in effect it destroys the jobs government is trying to create.
Deputy director general of intergovernmental and fiscal relations, Majileng Mgqaleni also spoke on the issue of non-payments. “It is a societal problem. Government owe municipalities, municipalities Eskom,” she said.
“We believe it is a political issue to be addressed on a political level. Everyone as citizens has the responsibility to pay for services for government to work.
Photo Credit- eNCA

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