---
title: "‘Buck stops here’: Parliament draws line on municipal impunity as municipalities face funding freeze"
description: "Official presentations and data frameworks given to members of Parliament placed Johannesburg at the top of the national default list with with a staggering R3.73-billion in overdue Eskom debt alone which forced national government to step in directly to keep basic services from collapsing."
type: "NewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "NO MORE"
author: "Anna Cox"
author_url: "https://www.dailymaverick.co.za/author/anna-cox/"
canonical_url: "https://www.dailymaverick.co.za/article/2026-07-19-buck-stops-here-parliament-draws-line-on-municipal-impunity-as-municipalities-face-funding-freeze/"
published: "2026-07-19T15:55:03"
lang: "en-ZA"
word_count: 1197
---

# ‘Buck stops here’: Parliament draws line on municipal impunity as municipalities face funding freeze

> Official presentations and data frameworks given to members of Parliament placed Johannesburg at the top of the national default list with with a staggering R3.73-billion in overdue Eskom debt alone which forced national government to step in directly to keep basic services from collapsing.

By Anna Cox · Published 19 July 2026, 17:55 SAST

## Key points
- Parliament takes a hard stance on municipal mismanagement, threatening funding cuts to non-compliant councils like Johannesburg.
- COGTA chair Zweli Mkhize emphasises accountability, while oversight committees challenge Treasury's approach and demand legal justifications for fund freezes.
- A dual ultimatum has been set, with Joburg facing pressure to rectify its substantial financial issues or risk losing local government grants.
- Amidst the financial crisis, tensions rise over the government's obligation to support failing municipalities while penalising them for non-compliance.

## Content

Parliament will no longer allow the tolerance of a culture of impunity – municipalities must take immediate responsibility for their lack of compliance.

These were the strong words used by cooperative governance and traditional affairs parliamentary committee chairperson, Dr Zweli Mkhize, in defending National Treasury’s aggressive strategy to withhold funding from 69 defaulting local councils, including the City of Joburg.

[Read more

Zweli Mkhize says blocking municipal funds a ‘last resort’ as Parliament urgently intervenes

July 16, 2026 ![Image](https://cdn.dailymaverick.co.za/i/bJmhlHChp-CSzJDHMoYbOAYgdTw=/450x0/smart/file/attachments/orphans/ED_591910_690204.jpg)](https://www.dailymaverick.co.za/article/2026-07-16-zweli-mkhize-says-blocking-municipal-funds-a-last-resort-as-parliament-urgently-intervenes/)

This unyielding stance was, however, directly challenged by a powerful coalition of Parliament’s own oversight committees, who have given Treasury a seven-day deadline to legally justify the freezing of funds.

This high-stakes institutional showdown runs parallel to a separate 75-day countdown giving Joburg until 30 September to clean up its finances and slash its historical unauthorised, irregular, fruitless and wasteful expenditure by 25% or face a permanent lockdown of its local government grants.

These parallel ultimatums are the tense outcomes of a gruelling, seven-hour marathon session on Friday called by four of Parliament’s joint oversight committees – the Portfolio Committee on Cooperative Governance and Traditional Affairs (CoGTA), the Standing Committee on Finance, the Standing Committee on Appropriations and the Standing Committee on Public Accounts (Scopa) where long debates took place between top legislators and Treasury officials over whether sudden financial lockdowns act as a “blunt instrument” that punishes ordinary residents for municipal mismanagement.

Official presentations and data frameworks given to MPs placed Joburg at the top of the national default list with with a staggering R3.73-billion in overdue Eskom debt alone which forced the national government to step in directly to keep basic services from collapsing.

Despite the intense debate over the impact on communities, Mkhize remained unyielding in his support for financial discipline.

“We support that because we have said it’s about time we draw a line to say the buck stops here. Parliament will not allow further tolerance of a culture of impunity. We want municipalities to take responsibility for their lack of compliance on this matter and correct the situation,” Mkhize said.

![Anna-fundinglockdown](https://cdn.dailymaverick.co.za/i/SZv3pg-tQ4KPIhCEw0X7e7WbSbY=/200x100/smart/filters:strip_exif\(\)/file/dailymaverick/wp-content/uploads/2025/03/ED_548463.jpg)

*Cooperative governance and traditional affairs parliamentary committee chairperson, Dr Zweli Mkhize. (Photo: Gallo Images / Volksblad / Mlungisi Louw)*

However, the joint committees collectively issued a stern weekend directive warning the executive branch that the stopping of transfers cannot replace the government’s duty to actively support failing councils, ordering an immediate legal review of the intervention.

The conflict deepened when Finance Minister Enoch Godongwana defended the cash freeze as a vital tool of last resort, asserting that the executive branch has the legal authority to manage defaulting councils firmly. He argued that under the law, Treasury is entitled to withhold municipal funds for up to four full months before Parliament has a statutory right to intervene.

“Our view is that we are entitled to go up to 120 days for as long as Parliament has not said stop... That is something that we will be submitting to legal teams in Parliament,” Godongwana said.

Standing Committee on Finance chairperson Mkhacani Maswanganyi directly challenged the sustainability of the strategy, citing the state’s obligation to actively build up local capacity under section 154 of the Constitution.

“The stopping of transfers may create pressure for compliance, but it is not, in itself, a municipal recovery strategy. It cannot replace the constitutional responsibility of national and provincial governments to support and strengthen the capacity of municipalities to manage their own affairs,” Maswanganyi said.

The debate inside the committee room exposed distinct operational differences at the top of government. CoGTA Minister Velenkosini Hlabisa broke away from Treasury’s aggressive methodology, arguing against the sudden shock of total financial lockdowns. Instead, he lobbied legislators to implement a mandatory, five-step warning framework before Treasury can ever execute a grant freeze again.

Under Hlabisa’s proposed rules, Treasury would be legally required to provide a minimum of 14 working days’ written notice, conduct joint consultations with local government bodies and apply partial funding restrictions rather than dropping a total financial hammer that paralyses an entire metropolitan economy.

### Government departments guilty of non-payment

While Treasury officials defended the R13.5-billion national freeze as a shift towards direct enforcement, committee data exposed a massive structural imbalance that provides mayor Dada Morero with a strong political argument – while Treasury is penalising Joburg over its utility bills, the country’s blacklisted councils are themselves drowning in a huge R217.8-billion debt owed to them by the public, businesses and state entities.

![Anna-fundinglockdown](https://cdn.dailymaverick.co.za/i/klJA7C42280CSB1zSPEkmn-bIfc=/200x100/smart/filters:strip_exif\(\)/file/attachments/orphans/ED_596299_890209.jpg)

*Mayor of Johannesburg Dada Morero at the Mayoral Imbizo in Region G, Lehae, on 17 February 2026. (Photo: Gallo Images / Sharon Seretlo)*

Crucially, R11.6-billion of that total is direct, uncollected debt owed by provincial and national government departments that have failed to pay their own municipal service bills.

Scopa chairperson Songezo Zibi launched a sharp counterattack, demanding a full registry of defaulting state departments, arguing that national organs must settle their accounts before squeezing local municipal budgets.

“Parliament must hold those departments and entities accountable so that municipalities receive the money owed to them and can deliver services to South Africans,” Zibi said.

### The ultimatum

Despite the pushback against Treasury’s harsh methods, legislators made it clear that local leadership cannot escape blame for the chaos. Standing Committee on Appropriations chairperson Mmusi Maimane warned that financial interventions are merely exposing deep-seated political rot and administrative incompetence within local councils, pointing directly to the failures of political cadre deployment.

“We cannot only rely on fiscal interventions, such as withholding funding, to improve governance in municipalities. We need more capable local government administrations. We must confront governance failures in local government... When there are poor players on a football field, we cannot suddenly conclude that the referee is the problem,” Maimane said.

### Treasury’s legal argument

Treasury justified the freeze as a legal “last resort” under section 216(2) of the Constitution and the Municipal Finance Management Act, triggered by Johannesburg and other defaulting councils repeatedly passing unfunded budgets, violating signed payment agreements with Eskom and failing to prosecute internal financial waste.

Defending the executive’s aggressive stance, Godongwana and Treasury Director-General Duncan Pieterse argued that formal warning notices were issued as far back as September and December last year, asserting that Treasury has the unilateral constitutional authority to withhold local government transfers for up to 120 days to enforce compliance before Parliament has any legal right to step in and stop it.

![Anna-fundinglockdown](https://cdn.dailymaverick.co.za/i/7E21XBdS5DlwtsoiU-Wzg2RyzrU=/200x100/smart/filters:strip_exif\(\)/file/dailymaverick/wp-content/uploads/2025/11/ED_476840.jpg)

*Treasury Director-generalDuncan Pieterse during a press conference at the Medium Term Budget Policy Statement in the Cape Town City Hall on 1 November 2022. (Photo: Gallo Images / Die Burger / Jaco Marais)*

To resolve this institutional deadlock, Parliament has ordered that within the seven-day deadline, Treasury, CoGTA and the Financial and Fiscal Commission must jointly execute two specific mandates:

- **Resolve the legal deadlock:** They must reconcile the conflicting interpretations of section 216(2) of the Constitution, specifically resolving whether Treasury’s unilateral 120-day fund freeze violates the Division of Revenue Act and the national government’s constitutional duty to support local councils before penalising them; and
- **Submit a service delivery safeguard report:** They must table a concrete compliance report outlining a revised framework that enforces financial discipline against corrupt or noncompliant officials without halting basic public utilities or putting ordinary communities in jeopardy. **DM**