Thank you House Chair. The native fact of the 2019 adjustments in this Bill is a staggering increase of the budget allocation by R24 billion. This adjustment allocation is mainly due to the additional financial support to Eskom through the Special Appropriation Bill and to a lesser degree to increases in debt service costs, the contingency reserves and provisional allocations.
The increase in budget deficit debt levels which are estimated to increase from R3 trillion to R4,5 trillion over the medium-term and debt service costs as well as the increased bailouts to state- owned enterprise, SOEs, particularly Eskom, will result in less being spent on social needs such as education and health. This I am sure we all agree that it is unacceptable.
The ACDP shares the views expressed by many that the country is facing a debt trap. We have said that hard decisions are necessary to save the economy and prevent the country from going over the fiscal cliff. The National Treasury has given the country an opportunity that should not be squandered with its Discussion
Paper on broad range of economic reforms required t kick-start economic growth. If these are implemented with speed and care, we, the ACDP, believe that they can lay the basis for much faster inclusive economic growth.
As far as this Bill is concerned, we are fully aware of the severe challenges facing the municipalities as highlighted by the speakers and the Auditor-General. Whilst municipalities must get their houses in order, it is possibly the time to revisit the equitable share determination for municipalities. We are pleased that the National Treasury is looking into this, however, no timeframe has been given to revise that formula.
In addition, the nonpayment of municipalities of bulk water and electricity is placing an intolerable burden on these service providers. Consideration should be given to withholding parts of the full equitable share ... [Inaudible.] ... that are due to be paid now to municipalities on 02 December that will send a very strong message to municipalities. The ACDP also shares concerns expressed by other members about the reductions of various grants set out in the Bill including the school infrastructure grant largely due to under spending. This, of course, is unacceptable.
In our view, the National Treasury needs to strengthen the oversight of those conditional grants and intervene in those provinces that are underresourced or undercapacitated. The same applies to the underspending at the local government level, R445,5 million under spending on those grants. Again, the National Treasury and Department of Co-operative Governance and Traditional Affairs must intervene to assist those local municipalities that are struggling because that is where service delivery is rendered and it is the most important. I thank you.