The Economic Freedom Fighters (EFF) has welcomed the postponement in adopting the 2025 Division of Revenue Bill by Parliament’s Standing Committee on Appropriations.
The committee met on Tuesday to consider the bill introduced by Finance Minister Enoch Godongwana on March 12.
Review of public submissions
Sinawo Thambo, EFF spokesperson, said the meeting included a review of public submissions and a discussion on whether to amend or support the bill as tabled. The final report is expected to be debated and adopted by Parliament on May 6.
Thambo said they welcomed the postponement as they had made submissions calling for changes to the bill.
“Our proposals were grounded in the realities of fiscal injustices at the local government level. They were aimed to initiate a process to restructure the distribution of revenue raised nationally to ensure progressive steps towards building people’s municipalities and local economic development.
“The core of our submission was the call to increase the local government allocation from the current 9.5% to 14% of the non-interest expenditure. This proposal was fully compliant with Section 9(6) of the Money Bills Amendment Procedure and Related Matters Act, which empowers Parliament to amend the Division of Revenue Bill within the adopted fiscal framework,” said Thambo.
Current funding model
He said the current funding model assumes that municipalities can generate revenue through rates and service charges. The red berets argue that this is not realistic in poorer areas.
He also claimed that the data used to inform the allocation is based on a 2010 survey. They believe this underestimates the number of households in need.
“We proposed that the R88.4-billion increase for local government be financed by cutting administrative overhead. Also cutting excessive consultant use and non-core functions.
Irregular expenditure
“For example, over R190-billion in irregular expenditure was flagged by the auditor-general in the last three years. We called for a 30% reduction in consultancy budgets, particularly for work that could be done in-house.
“The additional funds must be directed towards insourcing recurring services. Services such as waste collection, cleaning, and maintenance,” said Thambo.
