Chairperson, hon Minister, you will recall that last year the ACDP raised the issue as to whether the equitable share formula had been realigned, following the redemarcation of provincial boundaries. As pointed out in the 2007 Budget Review, the demarcation affects education, health, poverty and economic activity components of the formula.
The ACDP welcomes changes to the provincial equitable shares implemented in the 2007 Budget as this will undoubtedly allay fears regarding service delivery to those communities whose municipalities have been moved from one province to another. Provinces are preparing their 2007 budgets based on the realigned provincial equitable shares. Hon Minister, are you expecting any further adjustments to be made? Is it expected that there will be additional costs and if so, will they be substantial?
The FFC proposed that:
Any additional costs faced by the provinces and municipalities that cannot be met through the revised equitable share allocations be funded through a once-off allocation from national government.
The government's response to that proposal was that, "no additional allocations were made to the local government sphere", whilst provinces "may be able to absorb any additional costs that arise through the demarcation". Is this fair, and should the additional costs, if any, not have been funded by national governments, or is this a contingency included in the increased allocations to provinces?
Notwithstanding the above, the ACDP wishes to commend the Minister and the Treasury. We support this Bill. I thank you.