MPs in pickle over capping rate of municipal revenue growth

Posted On Tuesday, 03 June 2003 02:00 Published by eProp Commercial Property News
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Cape Town - The portfolio committee on finance's tortuous efforts to finalise the Municipal Finance Management Bill hit another stumbling block on Friday when it heard widely contradictory legal interpretations about the government's ability to place limits on municipal revenue-raising decisions.

Property-Housing-ResidentialAlthough treasury and many committee members believed that capping the rate of municipal revenue growth was essential in the overall plan to improve financial management and accountability in local authorities, some members of the Democratic Alliance had asked whether this was not unconstitutional in that it was an infringement of the legislative rights of local governments.

Lawyer Wim Trengrove had been asked to give his view on the matter and on Friday treasury officials said he had reported back that it could indeed be unconstitutional although they continued to hold that it was not.

It was pointed out that the Property Rates Bill now before another committee in parliament placed limits on rates increases by municipalities and that this had been deemed constitutional.

After much legal argument and the consideration of other, potentially contradictory legal opinions, said Barbara Hogan, the committee chairman: "This leaves us in a fine predicament  
... so why don't we just throw up some dice to decide which we will accept?"

It was agreed to refer the issue back to Trengrove, along with all the other relevant legislation, for a further opinion.

There was some concern that Trengrove disagreed with the treasury's view that procurement should be covered by its norms and standards and it was decided to reword the section to refer to the need to abide by a prescribed framework.

On how municipalities should deal with public-private partnerships, treasury officials said the department of provincial and local government should set up its own unit to match that in the treasury to help municipalities ensure that these long-term partnership agreements were only entered into after wide consultation. Most stakeholders had to be satisfied that they would be in the best interests of the local authority concerned.

The bill has been before the committee since the middle of last year. It has been revised to make the checks and balances on municipal finances as watertight as possible without infringing on their sovereignty.

Hogan said she hoped it could be finalised this week to complement the Public Finance Management Act in place for national and provincial governments.

Last modified on Monday, 19 May 2014 10:29

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