Honourable Members, national government is working closely with metropolitan municipalities to invigorate urban development. As the NDP emphasises, realising the economic dividends of urban growth requires a new approach to providing infrastructure, housing and public transport services, while overcoming the spatial divisions of apartheid.

This budget recognises the need to assist cities in mobilising the finance required for more rapid infrastructure investment and maintenance. Amendments will be proposed to the Municipal Fiscal Powers and Functions Act to clarify the rules surrounding bulk infrastructure charges, and ensure an equitable and transparent system of contributions by land developers.

The National Treasury has recently met the Mayors and City Managers of all eight metropolitan municipalities to discuss how to accelerate investment, improve infrastructure maintenance and strengthen financial management. Metropolitan councils will announce details of their investment programmes in their forthcoming budget statements. The National Treasury, the Department of Cooperative Governance and the Development Bank of Southern Africa will host a conference on urban infrastructure investment later this year. This will enable private investors to obtain further details of financing opportunities that will arise from this new programme.

I have also been reminded of the role of tax measures in supporting urban development. With us in the gallery today is Mr Vuyisa Qabaka, a Cape Town entrepreneur and co-founder of the Good Neighbourhoods Foundation. His advice is that, I quote: “Government should encourage township investment. For instance, it could promote urban development and regeneration through accelerated depreciation allowances for new building constructions or refurbishment of existing buildings.”

National allocations to municipalities continue to be equitably allocated and aligned with Minister Gordhan’s “Back to Basics” strategy. The local government equitable share was protected from the baseline reductions, to ensure that service delivery to the poor is prioritised. Allocations for water, sanitation and electricity in rural municipalities have been increased substantially. R4.3 billion will be spent over the next three years to build capacity and strengthen systems for financial management and infrastructure delivery.

The collaborative review of local government infrastructure grants will give special attention to the maintenance of infrastructure, so that the gains made over the past 20 years continue to be extended and enjoyed by all over the life of these assets.