House Chair, the Division of Revenue Bill in its current form is based on misguided assumptions influenced by international evidence without addressing South Africa's systematic structural problems that sustained apartheid spatial planning for the longest time. We know this because the Division of Revenue Bill is based on the same ideology as that of the Growth, Employment and Redistribution, Gear; the Accelerated and Shared Growth Initiative for SA, AsgiSA; and the failed National Development Plan, NDP. What are these assumptions?
Firstly, municipalities have the capacity to collect revenue efficiently. The reality is that since 1994 when the ANC agreed to pay large severance packages to retiring municipal employees, the majority of municipalities were left with skeleton staffs and have never recovered. Today, the majority of municipalities cannot collect revenue;
Secondly, people will start paying for services. This has not happened for two reasons. One, our people are unemployed and, two, the move towards treating basic services like water and electricity as profit-making services was driven by greed and a misguided principle of neoliberal policies from the Treasury;
Thirdly, there was an assumption that people will be employed and municipalities will benefit from a localised economy. This has not happened. In fact, there is no economic activities happening in municipalities; and
Lastly, another gross incorrect assumption was that rural areas will be developed into semiurban areas. The opposite happened. Too much attention is given to urban areas.
This is the reality, and we know that these assumptions are incorrect because out of all municipalities, more than 30% of them rely on transfers from the Division of Revenue more than their own revenue. If we remove metros and big municipalities like Polokwane, Mbombela, Rustenburg and others, this figure goes up to well over 50%.
All over the world it is the combination of two things that kick- starts the economy in a manner that transforms the lives of the people and grows the economy. Industrial policy that is based on the protection of infant industries in a manner that promotes localisation ... When you are building localised industries, municipalities must be at the centre of building basic infrastructure; building roads; providing water, sanitation and recreational facilities; and attracting people to come and work in these areas.
However, the proposed Division of Revenue Bill does not picture a situation whereby the economy will be localised and municipalities will play an important role in building infrastructure to support the economy. There are no believable plans to raise revenue for municipalities. There are no believable plans to build capacity for municipalities through the Division of Revenue Bill
allocation. There are no believable plans to ensure that there is redistribution of resources between the spheres of government. The ruling party does not know what to do with municipalities ... [Interjections.] ... or how to even repurpose useless and dysfunctional provinces to reduce poverty and unemployment, and deliver services. The ruling party has reached a dead end and lacks creativity. The undisputed reality is that if the ruling party continues to allocate less than 9% of the revenue raised nationally, it is continuing with apartheid spatial planning and it will be safe to say that the ANC is practising apartheid spatial planning. [Applause.]