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Pay up or lose your assets

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MEC Nomusa Dube-Ncube File picture: Patrick Mtolo/Independent Media
Durban - The Department of Co-operative Governance and Traditional Affairs (Cogta) is taking a tough stance against consumers who fail to pay for municipal services, saying it is now looking at attaching the assets and properties of those who refuse to pay up.

While tabling her budget before the legislature on Tuesday, MEC Nomusa Dube-Ncube said municipalities faced financial strain because people refused to comply with the “user pay” principle.

DA MPL Hlanganani Gumbi said the department and its municipalities were in poor shape, saying some were barely coping as they were owed R13.1 billion. This included R7.9bn in household debt, R3.5bn in commercial debt, R735 million in government debt and R413m in other debts such as traffic fines.

“If this problem is not addressed, municipalities are going to collapse. We are now looking at taking extraordinary steps to address this.”

The MEC said a variety of options were being explored, including the SA Revenue Service being asked to collect the money on behalf of the municipalities.

“We will look at options of legally accessing credit information from Sars, banks and the credit bureau. Consumers run the risk of having properties and assets attached for owing debts to municipalities.  

“We see people driving big cars, we have public servants and business people who are not paying for services.

“People pay for DStv and buy airtime and all these expensive things but not pay for electricity.”

Dube-Ncube said the failure to pay was putting the viability of municipalities in question. She said 90% of their revenue was generated locally by the municipalities themselves.

“Whatever the municipality buys and sells, they have to recover that money. If they buy electricity for R5m and only recover R2m, that creates a hole in their budget.

“The ongoing viability of the municipalities is a matter that requires more dedicated attention. We are going to be reviewing the enforcement provisions in municipal credit control, debt collection policies and by-laws.

“We want to strengthen enforcement provisions to allow municipalities to deal more decisively with deliberately defaulting consumers,” she said.  

Gumbi said 52 KwaZulu-Natal municipalities did not have enough cash to cover three months’ expenditure.

About 38% spend less than 75% of their capital budget. And it takes six months for the municipalities to collect monies owed, and two months to pay for services rendered.

He said 18 municipalities have debtors outstanding for nearly 90 days. “This is simply unacceptable,” he said.

“Add to this, the combined irregular expenditure of uMzinyathi, uThukela and uMkhanyakude districts has increased from R51m in 2010/ 11 to R796m in the 2014/15 financial year.”  

Dube-Ncube said the municipalities were facing challenges but would continue to deliver services.

The Mercury

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