9.10 Response by National Treasury With regard to the issues raised by provinces, National Treasury responded as follows: . The revenue raising capacity component was adjusted in 2011, and will further be reviewed in future. and should be viewed together with the other components. The intention of this component is to direct more funds towards municipalities that have limited potential to raise own revenue; . The Provincial Equitable Share formula does take into account the uniqueness and geographical spread of provinces. Some components, like the institutional and poverty components, actually benefit the more sparsely populated provinces; . Decaying infrastructure is a result of poor asset management and support is being given to provinces to improve their capacity to deliver and maintain infrastructure; . The re-demarcation between district and local municipalities is dealt with by specific clauses in the Bill; . The health component of the Provincial Equitable Share (PES) formula has been completely reworked, addressing some of the concerns raised, including the burden of disease; . The Provincial and Local Government Disaster Grant is subject to the requirements of the Disaster Management Act, which contains very specific definitions. The budget of provinces and municipalities must make provision for any disasters on a smaller scale; . A lot of the money going into rural areas is currently not being spent. Nevertheless, they do try to get more funds to the rural municipalities; and . The population data used in the Provincial Equitable Share formula is updated using annual mid-year population estimates.