House Chair, this Division of Revenue Bill must be considered against the dramatic geopolitical changes that have occurred since February’s budget.
At that time, honourable Minister, the ACDP said that the ship of public finances was starting to move in the right direction. The economy was expected to grow much faster on the back of improving investor sentiment, healthier state finances, and easing financial conditions.
However, the Middle East war, falling commodity prices, and increased pressure has resulted in the IMF cutting South Africa’s economic growth forecast to 1% for 2026. That is below the 1.1% growth rate achieved last year.
Now, as we know, lower-than-projected economic growth results in lower tax revenues, increasing pressure on the budget and on Division of Revenue Act (DORA) allocations.
Chairperson, higher economic growth cannot rely solely on consumer spending. It must be driven by fixed investment and improved business confidence.
Sadly, fixed capital investment contracted last year, and remains well below levels needed to generate sustained growth. Surging fuels prices, combined with rising water and electricity tariffs, are placing households under immense financial pressure The result is that taxpayers are correctly demanding value for every rand of tax they are paying. This, the ACDP believes, they are not fully receiving when one considers the dysfunctional state of most of our municipalities who are responsible for water, sanitation, electricity, roads and community services.
The Auditor-General continues to sound the alarm about the crisis at municipal level, with the trend of poor audit outcomes now also relating to some metros. This is deeply concerning, when only four of our eight metros received unqualified audit opinions. Shockingly, 13 municipalities failed to submit financial statements at all.
Last week, the Minister of Water and Sanitation correctly read municipalities the riot act, stating that the time for talk is passed. Maybe it is too little too late, but hopefully there will be some recourse in the regard, particularly with Local Government Elections looming.
It is clear that a new model of political leadership is needed—to elect candidates who understand stewardship of state resources, who are servant leaders; not there to loot of steal but to serve the people. We need Councillors who are competent, able, God-fearing, trustworthy, and who hate dishonest gain. Just think how we could turn our municipalities around if we have such councillors elected. These are the candidates the ACDP offers.
Despite our reservations, the ACDP will support this bill.
I thank you.
