The inability of municipalities to pay debt and spend their budgets is threatening their sustainability, the Treasury warned. The Treasury has released its preliminary report on local government revenue and expenditure for July 1 2016 to June 30 2017 in which it paints a bleak picture of municipal finances. The report comes at a time when Eskom has resorted to scheduled power cut-offs in a bid to get defaulting municipalities to pay their debts. A major contributing factor to municipalities’ woeful financial state is that households, businesses and government offices have more than R120bn in unpaid council bills. The Treasury doubts this debt can be recovered. “It needs to be acknowledged that not all the outstanding debt of R128.4bn is realistically collectable as these amounts are inclusive of debt older than 90 days (historic debt that has accumulated over an extended period), interest on arrears and other recoveries. “If consumer debt is limited to below 90 days, then the actual...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.