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The Portfolio Committee on Cooperative Governance and Traditional Affairs (COGTA) today resolved that Parliament should develop Joint Rules to provide a clear process for dealing with instances where National Treasury withholds funds from municipalities in terms of section 216 of the Constitution.
 
National Treasury last month announced the temporary withholding of equitable share transfers to 69 municipalities in an effort to effect accountability amid the affected municipalities’ non-compliance with legal prescriptions. Treasury has since announced the release of the funds if certain conditions are met.
 
Following a joint meeting with Treasury, the Department of COGTA, the South African Local Government Association (SALGA) and the Financial and Fiscal Commission (FFC), the committee requested a legal opinion to ascertain whether the decision was lawful. According to this opinion, Treasury acted within the law.
 
On Tuesday, the committee Chairperson, Dr Zweli Mkhize, said matters arising from the recent withholding of funds had, however, highlighted the need for clear parliamentary procedures setting out how such matters should be handled, including the role of committees, National Treasury and affected municipalities. The Chairperson noted that Parliament needed concrete guidance on what should happen if this situation arises again in future (when National Treasury invoke section 216). He said a clearly defined process would help prevent future disputes over whether the correct parliamentary procedure had been followed.
 
“We need rules setting out what the next step is,” the Chairperson said. “When National Treasury decides to withhold funds, and Parliament becomes involved, what is the process? Do we begin by referring the matter to the portfolio committee? Do we establish a separate committee to consider it? What happens after that? When does Treasury get an opportunity to come before Parliament and motivate its position? When do the municipalities concerned get an opportunity to respond, and once that has happened, how quickly does Parliament have to make a decision so that it can determine, within the 30 days, whether the withholding should continue? For me, that appears to be a possible lacuna that requires attention.”
 
The committee subsequently resolved that a letter should be written to the Speaker of the National Assembly requesting the drafting of Joint Rules providing for an appropriate parliamentary mechanism, including an ad hoc committee where necessary, when section 216 interventions arise.
 
The committee again emphasised that interventions aimed at ensuring municipal compliance should not cause further hardship to vulnerable communities already deprived of essential services and who had no role in municipal maladministration. “On the one side, we do want municipalities to comply. On the other side, we want services to be protected, particularly for the poor,” Dr Mkhize said. He said according to information provided, the affected municipalities had received some funding, while National Treasury continued working with them to resolve outstanding compliance matters.
 
Also on the committee’s agenda was the future handling of the Municipal Structures Amendment Bill, also referred to as the Coalitions Bill, that seeks to promote stable and accountable coalition governance. The Bill aims to provide a clear legislative framework for the formation of coalition governments and to establish mechanisms to minimise coalition-related challenges in local government.

The committee noted that the Bill has not yet been referred to it. As it awaits the Bill, the committee resolved to invite Mr George Michaelakis to formally conclude the process relating to his Private Member’s Bill. In April last year, after Mr Michaelakis presented his Municipal Structures Second Amendment Bill to the committee, it resolved that, due to the significant overlap between the two pieces of legislation, the two bills should be integrated into one Bill to avoid duplication and possible confusion among the public during public hearings.
 
The Chairperson noted that the committee wants to process this Bill as quickly as possible. “That will require cooperation among the different political parties, although the formal procedures will ultimately determine how quickly we can proceed,” he said. “There are also issues contained in the proposed Bill that I would suggest Members begin discussing within their respective parties. That way, when the formal process begins, we will already have an early indication of where disagreements are likely to arise and where there may be broad agreement. Once the Bill is referred, we can take it from there.”
 
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON COOPERATIVE GOVERNANCE. DR ZWELI MKHIZE.