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Salga weighs in on SAA’s R10.5bn allocation from govt

The legislation is aligned to the Medium-Term Budget Policy Statement (MTBPS) but deals with the equitable division of revenue among national, provincial and local governments.

Picture: 123rf.com

CAPE TOWN - The South African Local Government Association (Salga) was on Friday the latest body to oppose government plans to cut budgets to fund South African Airways' (SAA) business rescue plan.

Salga, which represents the country’s 257 municipalities, made a submission to Parliament on the Division of Revenue 2nd Amendment Bill.

The legislation is aligned to the Medium-Term Budget Policy Statement (MTBPS) but deals with the equitable division of revenue among national, provincial and local governments.

Salga briefed MPs about the envisaged impact of the MTBPS on local government finances.

The Finance Minister announced in his budget that budgets would be adjusted to accommodate the R10.5 billion allocation to SAA.

Salga’s head of municipal finance, Khomotso Letsatsi, said the reduction of local government conditional grants would total R613 million.

“It’s actually not right to take away R613 million from a sector that is already in need from an infrastructure point of view, financing and basically to address the organ; and especially to save SAA. Local government is basically in trouble.”

She said municipalities still had challenges of collecting revenue and were not able to invest in their own infrastructure.

“We don’t want municipalities to have the luxury of allocating internally-generated funds towards investing in infrastructure.”

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