Madam Deputy Speaker, the transformation of local government has been, and is, guided by the Constitution. Three key pieces of legislation and their respective subordinate legislative regulations have added meaning to our developmental state in general and the transformation of local government in particular. These are the Local Government: Municipal Structures Act, Local Government: Municipal Systems Act, and Local Government: Municipal Finance Management Act, which also enhance the quality of service to residents and users of municipal services in general.
This set of legislation, including the Intergovernmental Fiscal Relations Act, the Intergovernmental Framework Relations Act, the Property Rates Act, the annual Division of Revenue Act, legislation regulating water and electricity and the Municipal Fiscal Powers and Functions Act, form the basis for revamping municipal management.
This set of legislation, together with the Bill before us today holds public representatives, and in particular councillors and officials, accountable as it is intended to maximise the capacity to deliver sustainable services. This may be called a performance-driven approach to delivery services.
The Local Government: Municipal Systems Act and the Local Government: Municipal Finance Management Act and their respective regulations adequately deal with municipal user charges. When the Portfolio Committee on Finance deliberated on the Municipal Fiscal Powers and Functions Bill, it was sensitive not to compromise the municipalities' right to exercise their powers or perform their functions, as per section 152 and 153 of the Constitution.
These sections also stipulate that national legislation envisaged in these sections may be enacted only after organised local government and the Finance and Fiscal Commission have been consulted and all recommendations have been considered, including that of the Department of Provincial and Local Government. This department also made inputs at a special workshop hosted by National Treasury.
These stakeholders also attended the hearings of the Portfolio Committee on Finance and indeed made their presence felt. All these respective stakeholders, including the business sector, had a second opportunity to engage with the Portfolio Committee on Finance. They raised all issues that, in their opinion, had not been adequately addressed. The Portfolio Committee on Finance was sensitive to the issues raised and was, once again, mindful not to compromise the relative autonomy of local government.
Having listened and studied the verbal and written submissions and deliberations on the Bill, the committee is satisfied that the Bill strengthens the principle of co-operative governance.
The Bill before this House is not intended to introduce new municipal taxes but to set a framework in terms of which any proposal for a new municipal tax would be subjected to and ensure that it is in line with the national and local government fiscal taxation framework, and not to place undue burden on any sector.
This Bill, at one level, is a stand-alone Bill. It is an exact Bill. It gives meaning to section 229(2)(b) of the Constitution, which gives local government certain financial functions and powers.
This Bill is an enabling framework to usher in checks and balances, with the objective of giving effect to section 229 of the Constitution by providing appropriate norms and standards to proactively prevent the potential negative consequences of inappropriate surcharges, and to create an enabling framework for the authorisation and implementation of municipal taxes.
This Bill also takes into account and effectively addresses the delays in approving a proposed new municipal tax by the Minister, which may impact negatively on service delivery and may have cost implications on the municipal fiscus - taxes and other collected monies used by government. This concern is accommodated by the provision of a six-month period, rather than the initial 18-month period, to consider an application.
Why is this necessary, it may be asked? Well, how long do we think a detailed analysis should be undertaken to determine a possible impact of a proposed new tax on taxpayers? The objective of this Bill is not to introduce new municipal taxes, it is to provide a set of guidelines that will subject a proposed municipal tax to scrutiny. In the main, the intention is to ensure that such proposals are in keeping with national and local government fiscal and taxation frameworks. It must be stressed that our scrutiny of regulations is a constitutional requirement and, as members of this House, we are desperately found wanting in the execution of this responsibility.
Section 42(1) prescribes that, prior to the Minister of Finance authorising a municipal tax, the Minister must consult the Minister responsible for local government, and consultation with organised local government is imperative. I believe that the portfolio committee on local government is adequately sensitised on the content of this significant Bill. It is critical that both the Portfolio Committee on Finance and the Portfolio Committee on Provincial and Local Government jointly exercise a meaningful oversight role on its implementation once it is enacted.
It is this process of oversight and the vigilance of organised local government that will ensure that the relative autonomy of local government, within the co-operative governance constitutional principle, is not compromised.
The ANC supports this Bill. Thank you, Madam Deputy Speaker. [Applause.]