Municipal salary cuts raise red flags

by Kelebogile Matlou

South African municipalities spent 27.4% of their total running costs on salaries in the last quarter of the 2024/25 financial year, according to a National Treasury report. But salary spending actually dropped by 0.9% compared to earlier budgets despite inflation rising by 3.6%.

This means R1.5 billion less was spent on salaries, and it’s not clear if this was due to fewer staff. The Auditor-General recently pointed out that many municipalities have unfilled jobs, especially in important departments like finance and technical services.

By the end of March, about 30% of the salary budget had still not been used. Treasury warned this could cause a rush to spend the money before year-end, which might lead to waste or irregular spending.

Only 16% of municipalities received clean audits, according to the Auditor-General. “The financial health of municipalities remains weak… Money is being lost through non-compliance with legislation and suspected fraud,” The report said.

In March, the South African Municipal Workers’ Union shared its anger, saying, “Its profound outrage at the ongoing and systemic failure of municipalities to pay workers’ salaries, a crisis that has escalated to catastrophic levels and represents nothing short of economic violence against municipal workers.”

National Treasury’s report gives a full picture of local government spending and checks how municipalities are using their budgets, including grant money. Treasury said the report promotes transparency in reporting, enhances in-year management and the oversight of the financial performance of municipalities against their adjustments budgets.

It also acts as a “management tool that serves as an early warning mechanism” to help councils, legislatures, and municipal managers take action before problems get worse.