Maile’s administrators trying to push Tshwane off a fiscal cliff – DA
The party is alarmed by a 36% dip in cash flow, which they owe to under-collection in municipal revenues due to the lockdown.
Tshwane. File image: iStock
In their latest statement regarding the state of affairs in the City of Tshwane, the Democratic Alliance (DA) has come to the conclusion that the city’s recent financial reports show “the beginning of a collapse of the city’s income and revenue streams.”
As vehement opponents of the city’s current state of administration, the party attributed this development to the alleged mismanagement of what they consider an unlawfully appointed administrator.
The city’s council was dissolved in March and placed under administration by Gauteng Premier David Makhura after successive attempts to hold council meetings proved unsuccessful.
The onus was later placed on Lebogang Maile in his capacity as Cogta MEC to announce the city’s new administration team which he did at the end of March.
“For the first three weeks of April, the city reported a cash flow that was 36% below what was projected for this period. This is due to the under-collection of R610 million in municipal revenues,” said the DA in a statement.
“This is catastrophic for the city’s finances, and unless stringent financial interventions are deployed the resulting losses could plunge the city into serious financial distress.”
The party acquiesced that the possible financial constraints presented by the lockdown may be a likely contributing factor to revenue loss. However, the party still believes that for the collection to be as low as 64%, the actual figures reported indicate that something has gone seriously wrong with the city’s ability to ensure a reasonable level of collection during these trying times.
The DA believes that if this trend continues, it could seriously hamper the city’s ability to deliver services, – especially during a lockdown when most people find themselves at home.
“Maile’s administrators have been deployed since March and it is clear that they have failed hopelessly in ensuring that there was stability in the management of the city’s finances. At the end of June 2019, the DA-led administration managed to ensure the city was in surplus to the tune of R2 billion as a result of cost-cutting and strict financial management. Similarly, the operating account at the end of March 2020 was R284 million. It is likely that all that progress is going to be lost under Maile’s administrators.”
The party advised the administrators to immediately introduce cost-saving initiatives to reduce unnecessary spending in the city as this could also ensure stability in the debtors’ book to better manage cashflow.
“The budget planning for 2020/21 should also be adjusted to ensure that income projections are set to mitigate this under-collection. This must be one of the core service delivery objectives.”
The DA is alarmed at the fact that any other decision could lead to “financial ruin in the capital”.
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