SAMWU CONDEMNS NATIONAL TREASURY’S IRRATIONAL DECISION TO WITHHOLD MUNICIPAL FUNDING

7 July 2026

SAMWU CONDEMNS NATIONAL TREASURY’S IRRATIONAL DECISION TO WITHHOLD MUNICIPAL FUNDING

The South African Municipal Workers’ Union (SAMWU) condemns, in the strongest possible terms, National Treasury’s reckless decision to temporarily withhold the July 2026 equitable share allocations to dozens of municipalities across South Africa. While Treasury claims this measure is intended to enforce fiscal discipline and compliance with the Municipal Finance Management Act (MFMA), its practical effect will be to push already struggling municipalities closer to collapse, with devastating consequences for workers, communities, and the delivery of essential public services.

National Treasury has sought to reassure the public that withholding these funds will have no impact on service delivery. Nothing could be further from the truth as municipalities cannot provide water, sanitation, electricity, refuse removal, or road maintenance without the financial resources necessary for daily operations. Furthermore, municipalities cannot pay workers’ salaries, honour pension and medical aid contributions, settle third-party deductions, or meet obligations to service providers if the very funds intended for these functions are frozen.

The inevitable consequence of this decision is that municipal workers will once again face severe uncertainty over their salaries, while communities bear the burden of deteriorating public services. This is not a corrective intervention but rather a recipe for deepening the municipal financial crisis.

SAMWU has consistently maintained that municipal workers are not responsible for the financial mismanagement plaguing local government. Workers did not authorise irregular expenditure, approve unfunded budgets, or fail to implement consequence management against officials guilty of financial misconduct. Yet, instead of holding those individuals personally accountable, National Treasury has chosen the path of collective punishment, imposing measures that hit workers and poor communities the hardest.

It is deeply ironic that National Treasury acknowledges many municipalities are already struggling to meet their obligations to Eskom, water boards, and SARS due to a deteriorating financial position. By withholding equitable share allocations, Treasury is not solving the crisis, but rather it is accelerating it.

This latest decision is not an isolated incident, it forms part of a broader pattern of National Treasury’s interference in local government and its relentless pursuit of austerity policies that undermine municipalities, collective bargaining, and public service delivery. For years, SAMWU has warned that Treasury’s obsession with fiscal consolidation comes at the expense of ordinary citizens. Instead of strengthening local government, Treasury has become synonymous with arbitrary budget cuts, chronic underfunding, the erosion of municipal capacity, and direct attacks on collective bargaining agreements.

We therefore call on the national government to urgently rein in a National Treasury that has increasingly assumed powers far beyond its constitutional mandate. Treasury’s continued interference has transformed it from a custodian of the public purse into an institution that frustrates developmental local government. It is particularly concerning that such a reckless decision has been taken in an election year, when communities expect government to improve, rather than cripple, service delivery.

If National Treasury genuinely had the interests of municipalities and residents at heart, it would have pursued the constitutional mechanisms available to support failing municipalities instead of starving them of resources. Section 139 of the Constitution provides clear intervention mechanisms through which national and provincial government, working alongside the Department of Cooperative Governance and Traditional Affairs (CoGTA), can assist struggling municipalities. These interventions are designed to restore governance and protect communities, yet Treasury has instead chosen the most destructive option available.

This decision confirms exactly why we have called for a National Day of Action against National Treasury. Our upcoming march on the 9th July is about defending public services, protecting local government, preserving workers’ livelihoods, and rejecting an austerity agenda that threatens developmental local government in South Africa. Time and again, Treasury has proven itself to be an obstacle to service delivery and a barrier to the transformation of local government.

We call upon municipal workers, communities, progressive organisations, and all South Africans to support the Union’s National Day of Action. The struggle against austerity is inseparable from the struggle for functioning municipalities and decent work. We cannot allow unelected officials in National Treasury to determine the fate of our communities through policies that impoverish workers and weaken democratic local government.

Consequently, SAMWU demands the immediate reversal of the decision to withhold equitable share allocations. We call for urgent engagement between National Treasury, CoGTA, organised labour, and municipalities to develop interventions that restore financial stability without collapsing services or jeopardising livelihoods. The future of local government cannot be built on austerity. It must be built on investment, accountability, democratic governance, and a genuine commitment to improving the lives of the working class.

Issued by SAMWU Secretariat

Dumisane Magagula, General Secretary, (076 580 4029) or Sam Lekhuleni, Deputy General Secretary (082 526 5224) or Papikie Mohale, National Media Officer (076 795 8670)