The MKP and the EFF have strongly condemned the National Treasury’s decision to temporarily withhold R13.5-billion in local government equitable share transfers from 69 non-compliant municipalities.

The freeze impacts major municipalities and local authorities across all nine provinces, including the City of Johannesburg, Mangaung, Buffalo City, Nelson Mandela Bay, Madibeng, and Nkomazi.

Both opposition parties argued that withholding vital funds shifts the burden of municipal maladministration onto ordinary citizens while worsening service delivery failures.

MKP national spokesperson Sifiso Mahlangu warned that blanket financial pressure fails to fix systemic local governance issues.

He stressed that uniform penalties are inherently inequitable because the current funding model sets municipalities up to fail.

"Yes, municipalities must be held accountable, and yes, public money must be protected from waste, irregularity, and abuse. But blanket financial pressure is not a solution, and the current funding model and equitable share formula often means that municipalities start from unequal positions of fiscal capacity,” said Mahlangu.

The MKP argued that the State should target the specific individuals responsible for financial failures rather than punishing residents.

The party called for decisive disciplinary action and criminal referrals for corrupt officials, direct forensic investigations to recover lost public funds and a complete overhaul of the equitable share system to account for poverty burdens, dispersed settlements, and historical infrastructure backlogs.

Mahlangu noted that suspending transfers to struggling regions does not correct misconduct. Instead, it worsens local instability and deepens an already uneven baseline of service delivery.

The EFF levelled heavy criticism at both the ANC and DA for their persistent mismanagement of local government.

Citing figures from the Auditor-General, the EFF highlighted that municipalities have racked up R145.21-billion in irregular expenditure since the 2021/22 financial year, with R40.14-billion wasted in 2024/25 alone, alongside R24.12-billion in fruitless and wasteful expenditure.

While the EFF acknowledged that many local authorities have collapsed, it rejected National Treasury’s intervention strategy.

The party stated that “municipalities have failed the people, and now the National Treasury is doing the same".

To resolve the fiscal crisis permanently, the EFF proposed the revision of the equitable share formula to boost the municipal allocation to over 15% of nationally raised revenue, up from the current 9% (R110-billion).

The party wants dedicated infrastructure grant technical units in all municipalities to oversee and coordinate large-scale development projects funded by conditional grants.

It also called for the implementation of well-regulated, non-profiteering public-private partnerships to deliver community assets without inflating costs or producing low-quality work.

Both opposition parties maintained that the solution to South Africa's local government crisis is not providing less money, but fundamentally reworking the fiscal assumptions that govern municipalities.

The EFF demanding that the Finance Minister, provincial MECs, executive mayors, and municipal managers must cooperate immediately to design measurable, constructive steps to stabilise local government finances without cutting off the public's lifeline.

Meanwhile, The Parliamentary Portfolio Committee on Cooperative Governance and Traditional Affairs has urged struggling municipalities to meet National Treasury conditions immediately to secure vital funds and protect local communities.

Committee chairperson Dr Zweli Mkhize demanded immediate consequences for councillors and managers who mismanage public resources.

He urged municipal leaders to eliminate unfunded budgets, address poor audit outcomes, and build stable administrative capacity.