Madam Speaker,

Local governments continue to face significant financial management and governance challenges.

Too many municipalities do not charge tariffs that reflect the full cost of the services they deliver, in particular for water services.

Many municipalities do not collect the funds that are owed to them, and do not adopt credible budgets.

As a result, they are unable to pay their own creditors.

National government already provides extensive capacity support to municipalities, but over the period ahead we will review the effectiveness of these different support measures and introduce a new instrument designed to assist the turnaround of some of the most troubled municipalities.