Bad spending habits by the country’s municipalities were undermining their financial stability and service delivery prospects, Finance Minister Pravin Gordhan said on Wednesday. Gordhan, who has served as minister of co-operative governance and traditional affairs, said the operating expenditure of the country’s 257 municipalities was expected to increase by 30.7% compared to the operating revenue of 19.7%. He said increasing operating expenditure that exceeded revenue was unsustainable. Estimates for the 2015-16 adopted budget for operating expenditure stood at R306bn, while operating revenue in the same period was at R304bn. In an accompanying report tabled in Parliament on Wednesday, the Treasury warned that while municipalities intended to raise external loans of R35.4bn to fund infrastructure development in the medium-term review and expenditure period, they were unlikely to generate enough revenue to cover operational expenses for 2016-17. Municipalities have committed to cont...
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