The 2025 Division of Revenue Bill forms a cornerstone of our fiscal framework and a reflection of our commitment to equitable governance and developmental justice. This Bill determines how nationally raised revenue is distributed across the three spheres of government. Today, the Democratic Alliance (DA) will focus on its implications for both KwaZulu-Natal’s (KZN) provincial government departments and municipalities.
As one of South Africa’s most populous provinces, KZN faces immense pressure to deliver quality services with the provincial government departments of Education, Health, Social Development, Transport and Public Works being the engine rooms of service delivery. Yet, they remain underfunded and overstretched.
• In Education, while allocations have increased nominally, they fail to keep pace with inflation, rising learner numbers and infrastructure backlogs. This while our rural schools continue to operate without proper sanitation, libraries or digital access. The DA calls for a ring-fenced infrastructure grant for rural schools and performance-linked incentives for provinces that improve literacy and numeracy outcomes.
• In Health, KZN’s provincial hospitals and clinics are under strain due to staff shortages, outdated equipment and – despite funds intended for medicine purchases being ring-fenced, poor management of purchasing medicine stocks timeously to the ultimate detriment of patients.
• KZN’s Social Development allocations remain modest despite growing demand. During the recent public hearings, citizens raised concerns about the funding of non-profit organisations (NPOs) that deliver critical services. The DA supports direct provincial support to NPOs, particularly those serving vulnerable groups in rural areas.
• KZN’s departments of Transport and Public Works face similar challenges. Road maintenance and infrastructure upgrades are essential for economic development, yet funding remains unspent – in the case of Transport, close to R1billion will remain unspent.
Despite these challenges, the DA is confident that the KZN financial dashboard system, recently introduced by Finance MEC, Francois Rodgers, will greatly assist the provincial Legislature, in real-time, to assess funding and expenditure patterns.
Turning to local government, the financial situation is equally concerning. Treasury’s data shows that while metropolitan municipalities receive substantial per capita allocations, smaller municipalities – including many in KZN – continue to be underfunded.
SALGA’s submission to the Select Committee on Appropriations adds further weight to this argument. The association has highlighted the continued use of outdated data – specifically the 2011 Census – to determine the Local Government Equitable Share (LGES). This disadvantages municipalities that have experienced significant demographic shifts. The DA supports SALGA’s call for the urgent adoption of Census 2022 data to ensure fair and accurate allocations.
There is however a flip-side to this. Municipalities must spend the conditional grant funding allocated to them. Failure to do so results primarily from factors such as capacity issues, poor planning, weak monitoring, bloated organograms and poor revenue collection. Municipalities that fail to heed National Treasury warnings, must prepare to lose the funding completely. .
KZN’s Finance portfolio committee has fulfilled its constitutional obligation under Section 118 by facilitating public participation around this Bill. Its negotiating mandate supports the Bill but rightly calls for the concerns raised – particularly around rural funding and NPO support – to be considered in final deliberations.
The DA supports the Bill in principle, but with clear conditions:
• That provincial and municipal allocations reflect real service delivery costs, particularly in rural and underserved areas
• That Census 2022 data be used to revise the LGES formula and;
• That transparency and efficiency in spending be improved across all spheres.
As part of KZN’s Government of Provincial Unity (GPU), the DA remains committed to ensuring that every rand allocated to our province translates into real, measurable impact for its people.