MINISTRY OF PROVINCIAL & LOCAL GOVERNMENT
10 September 2001

Document Handed Out:
Minister’s Media Briefing [See Appendix below]

17. Can we please have more detail on the property rates bill?

1. Right now property rates are imposed on the basis of old order legislation. There is no uniformity that you require as a country. The Bill does not seek to take the role away from the municipality but seeks to get uniformity and to ensure that the basis on which the rates are calculated is updated.

17. There was criticism on the process followed in that it lacked transparency. What response do you expect from the critics? Are they going to be satisfied or what might the points of friction be?

1. The process is as transparent as when all the other departments and this department want to propose a bill. What was unfortunate is that the Bill was going to be introduced before the local government elections and it was therefore used as an electioneering tool. Now the atmosphere is favourable. We expect critical response and this is what we want.

17. Are you happy that the municipalities have the capacity to deal with the infrastructure projects?

1. Notwithstanding that lots of work needs to be done for capacity building progress has been realised. There is a concern that some municipalities where the need is greatest does not even have the capacity to put together a business plan. It is mainly in poor municipalities that there is a lack of capacity. Many councillors and managers are going through training to increase capacity. The government set aside R65 million to deal with the lack of capacity in rural municipalities.

17. There was much debate on the remuneration of councillors. Do you have a comment?

1. It is agreed that something needs to be done when looking at public office bearers. Conditions needs to be created that will make the local government sphere attractive to people. It has not been decided what the councillors will receive. At the moment it is in a consultation process.

17. Is the principle of loans to pay off debts a good one? (Municipalities borrow money to pay their debts)

1. Certain municipalities are in a bad position especially if they have a limited tax base. The demarcation of municipalities is intended to solve this. Municipalities will try all innovations including borrowing money. Government must first look at how the nationally allocated revenue is distributed across the 3 levels of government because local government is shouldering responsibilities for what they do not have resources for. The efficacy of loans to service debts must be assessed in the context of what share of the national revenue is going to the local government.

17. Do you have any comments on the suspension of the mayor, allegations of fraud and the breach of ethics?

1. My view was not asked for by the unicity or the province so I never applied my mind to the question. If my view is required I will apply my mind and give one.

17. What measures are in place to fight corruption and educate officials about the dangers of corruption?

1. Education is important therefore the capacity building training. Sometimes what is perceived to be corruption is actually due to incapacity.

17. Municipalities find it difficult to collect service charges from people. How are they going to collect from people who never paid anything before? Also does the Rates Bill propose taxing agricultural land?

1. The Bill provides for the imposition of rates it does not impose rates. The Bill is open for discussion and debate. The municipalities impose the rates but the bill will set boundaries and parameters.

17. Are you saying that the Bill does not introduce tax on agricultural land?

1. The Bill proposes that certain sectors must be treated in a certain way.

17. So are you saying that it will impose a tax on agricultural property?

1. No. I do not want to debate the Bill now. It will come before parliament where it will be debated.

17. The Deputy mayor took documents and her problems to Tony Leon and then went back to the Municipality to have the problems sorted out. What structures are in place to deal with such situations?

1. At provincial levels inter-governmental forums are encouraged to sort out problems between provincial and local government. There is however no obligation to do this. There is nothing in law that prevents the deputy mayor from going to Tony Leon.

There were no further questions and the briefing was closed.

Appendix:
PARLIAMENTARY MEDIA BRIEFING BY THE MINISTER FOR PROVINCIAL AND LOCAL GOVERNMENT, SYDNEY MUFAMADI,

10 September 2001

1. Introduction
To you Ladies and Gentlemen of the media, a hearty welcome to this parliamentary briefing.

Shortly after the Cabinet lekgotla we briefed the media on Government's two important developmental programmes: the Integrated Sustainable Rural Development Programme and the Urban Renewal Programme. Today's briefing will concentrate on the Department of Provincial and Local Government's flagship programmes namely the Local Economic Development Programme and the Consolidated Municipal Infrastructure Programme. These are the two programmes through which the Department contributes towards the realisation of Government's overall policy objectives. The objectives being economic growth, poverty alleviation and job creation. More importantly, these programmes provide local government with a platform and means to play its developmental role.

We shall proceed to speak on two specific Bills which are in the process either of being submitted to Cabinet or to Parliament. These are: the Property Rates Bill and the Disaster Management Bill. We are focusing in particular on these because of their relevance to the objective of building stable municipalities and creating the conditions for sustainable development and livelihoods.

It is common cause that the macro stabilisation success we often boast about as a country is partly a result of a credible and prudent fiscal stance established by Government. The challenge we face is one of ensuring that the proceeds of this success are fed back into the prospects of future growth. Nowhere is this more important than at the local level. It is of paramount importance that we assist municipalities in providing for the conditions for local growth and in so doing, assist to ensure financial viability and stability. In this regard, two programmes of the Department of Provincial and Local Government are important: the Local Economic Development Programme and the Consolidated Municipal Infrastructure Programme.

As you know, although my Department issues guidelines for the development of projects, the projects themselves are conceptualised and formulated by municipalities. Thus the programmes themselves are an exercise in enhancing the capabilities of local government to recognise problems, to analyse options of reaction, and to implement solutions.

2. Local Economic Development
The LED Fund has supported a total of 184 projects since 1999. Of these 19,5% are in progress, 13,5% are completed (mainly from the 1999/2000 allocation), 20,6% are in advanced stages of implementation and 46% have not started (primarily the 2001/2 allocation). Projects for the 2001/2 financial year have all received financial transfers but are in the planning and tendering stages at present.

The results of the 1999/2000 LEDF of R42 million, of which R39 million were transfers, are indicative of the performance of the other two years.

Of the total number of 5 888 people employed, 30% were women. 61% of people employed through LEDF projects were during the construction stages of the project. The remaining number of 2 567 people has received long-term employment. A total of 2 089 people received on-the-job training. Almost two-thirds of this training is accredited. Of these 53% were women.

Almost R24 million of the R39 million (61%) transferred for projects was spent on infrastructure in the form of equipment, tools and buildings. R3.18 million (8%) was regarded as direct support to Small Medium and Micro-sized Enterprises in terms of subsidised equipment and rentals.

Overview of the overall patterns of Investment - Rural/Urban
The two graphs below provide the breakdown of LEDF funds distributed over the past three years in terms of the rural/urban classification. 98 projects, or 52% of projects, are classified as rural and 88 projects as urban. A total of R96 million has been spent in rural areas and R90 million in urban areas.

3. CMIP
The purpose of the Consolidated Municipal Infrastructure Programme (CMIP) is to further the aims of the Reconstruction and Development Programme (RDP). CMIP aims to enhance the development impact of the delivery process by focusing, for example, on the transfer of skills, the promotion of small, medium and micro-sized enterprises (SMMEs), using labour-intensive construction methods, and maximising job-creation opportunities. Since its inception R3,3 billion of CMIP funds have been allocated to various project categories (such as water, sanitation, roads, solid waste, community lighting, storm water, community facilities and training).

As part of Government's policy to make available free basic services to poor households, CMIP will provide infrastructure resources. This also contributes to Government's commitment to the URS and the IRDP.

Endeavours to co-ordinate all infrastructure programmes between departments receive continuous attention

4. Property Rates Bill
Another key mechanism to assist in ensuring local financial viability and stability is the Property Rates Bill.

The Property Rates Bill is to be submitted to Cabinet on 19 September 2001, for consideration at the Cabinet meeting of 3 October. It will probably be enacted in the first quarter of 2002. The Bill regulates property rates in accordance with section 229 of the Constitution, and provides a uniform framework for the valuation of property, for local rates policies, for the levying of rates, and for objections and appeal.

5. Disaster Management Bill
It is difficult to speak of stability and financial viability, when some of our municipalities have to contend with the additional burden of natural and other disasters. Most often, it is the poorest and most marginalised who suffer most in disasters. Apartheid spatial planning is such that the poorest were pushed onto the peripheries of our living areas, commonly forced to occupy land not suited for human occupation. Government has spent more than R60 million on disaster management in the last two years. The local disaster in Khayelitsha is a case in point. The ongoing bad weather has meant that in the Cape Town Metro almost 8 000 households have been displaced by flooding.

We have seen the debilitating effect of these disasters on social and productive infrastructure - infrastructure on which we rely for economic growth and development. Given all this, the need for a preventative approach to disaster management cannot be over-emphasised.

The main aim of the new Disaster Management Bill is to try and prevent disasters or mitigate the effect of disasters. This will be achieved by linking disaster management to municipal development. In this way it is hoped that the most vulnerable and poorest of our people will not be affected as adversely by disasters as at present.

On this note, I wish to remind you of the tragic loss of life in the Kruger National Park which was caused by fire. National Government is working closely with the provincial government of Mpumalanga and South African National Parks to assist the bereaved families to cope with the effects of the tragedy. Both the Department of Labour and SANParks have instituted separate enquiries into the circumstances of this tragedy. We await the outcome of these enquiries with keen interest. We hope they generate the material, which will help us to prevent incidents of this kind from occurring in the future. Our hearts go out to friends and relatives of the victims of this tragedy.

For further information please contact Brent Simon, Media Liaison Officer, Department of Provincial and Local Government at 082 453 6826

Issued by Ministry of Provincial and Local Government