Treasury to start taking money directly from budgets of departments that owe municipal debt - Mashatile

CAPE TOWN - Deputy President Paul Mashatile says National Treasury will start taking money directly from budgets of departments that owe municipal debt.

Mashatile said intergovernmental debt has gotten out of hand and they've been left no choice but to “top slice” departmental budgets to transfer the money to municipalities.

On Thursday, Mashatile was responding to questions in the National Council of Provinces (NCOP) on excessive intergovernmental debt and plans to address the growing trend.

The deputy president was asked if government had considered developing ways to address growing intergovernmental debt that has a negative impact on the delivery of services to communities.

He said mostly municipalities are owed billions by departments and this negatively affects mostly small councils with limited budgets.

Mashatile said National Treasury would now consider “top slicing” budgets of departments to pay off their municipal debt.

“In fact, the issue of top slicing is critical. It should not be allowed that government departments should default, whether against one another but particularly towards municipalities.”

Mashatile said this is an important intervention because some municipalities can’t pay water boards because of the debt.