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SA households owe billions

Jun 05 2012 16:39 Sapa

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Cape Town - Almost two-thirds of the R76.6bn owed to South Africa's municipalities by consumers is owed by households, says National Treasury.

According to its Third Quarter Local Government Section 71 Report released on Tuesday, a "certain percentage" of this is probably irrecoverable.

The report, which deals with local government revenue and spending for the period July 1 2011 to March 31 this year, finds that the economic slowdown and "substantial increases" in electricity tariffs are starting to impact on the ability of consumers to pay for services.

The municipal financial year ends on June 30.

In a statement issued to mark the release of the third-quarter report, Treasury said aggregate municipal consumer debts amounted to R76.6bn on March 31 this year.

"Households account for the largest component of consumer debtors, accounting for 64.9%, or R49.8bn.

"It is accepted that a certain percentage of this debt is probably irrecoverable, because municipalities have not been writing off irrecoverable debts on a consistent basis."

The statement did not put a figure on the irrecoverable debt, saying only that it was "working on reporting processes" to get better information in this regard.

Outstanding debt due to the country's metropolitan municipalities amounted to R45bn.

"This represents an increase of R7bn, or 18.4%, from the third quarter of the 2010/11 financial year, of which (the) City of Johannesburg accounted for 31.8%, or R14.3bn."

On municipal spending, it says municipalities had spent, on aggregate, 63.8%, or R163.9bn, of their total adjusted budget of R256.8bn by March 31 this year.

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