Madam Speaker, sustainable communities require strengthened intergovernmental cooperation between national government, provinces and municipalities. Improved alignment in the delivery of services such as housing, water, sanitation, electrification and public transport is central to achieving the objectives set out in the Integrated Urban Development Framework.

R18.4 billion over the medium term is allocated to the Regional Bulk Infrastructure Grant and R12.5 billion to the Water Services Infrastructure Grant. These allocations continue to prioritise water provision in the 27 most impoverished district municipalities.

R1 billion is added to the local government equitable share in 2018/19, in view of rising household numbers and infrastructure maintenance requirements.

Last year I reported on the progress being made by our metropolitan municipalities in reversing the spatial legacy of apartheid, through targeted investment in high density corridors linking townships back into our cities. This spatial transformation is a massive challenge involving land acquisition and development, infrastructure and transport services, housing and industrial and enterprise support. Much of this depends on collaboration between government and the private sector.

We will continue to work with our cities to improve the safety and reliability of public transport services. Commuter rail currently provides for over 20 percent of all passengers carried in the cities. This budget provides resources to subsidize 457 million rail passenger trips next year, as well as ongoing support to upgrade rolling stock and improve signalling systems.

All our metropolitan municipalities are undertaking a portfolio of catalytic, integrated urban development projects that will lead the way in reshaping our cities:

We have also seen substantial investment in township precincts in response to the neighbourhood development partnership grant. 190 projects have been completed and a further 55 are in construction.

Encouraging investment in cities and townships requires initiatives of many arms of government. Minister Sisulu will shortly release a White Paper on the reforms necessary to build more inclusive residential property markets, and accelerate the upgrading of informal settlements. The National Treasury is working with municipalities on measures to reduce the cost of dealing with construction permits, obtaining electricity connections and registering property. The Department of Trade and Industry is leading a similar initiative with other departments and agencies to make it easier to start a business, pay taxes, get credit, trade across borders, enforce contracts, and resolve insolvencies.

Local initiatives are often the key to progress in tourism and the hospitality industry. Ms Lisa Sheard captured this well in her budget “tip”: “Tourism encourages ‘pride of place’. Pride of place ensures that the water will run, the streets will be clean, signage will be clear…” Ms Sheard also wrote that “Tourism is ‘woman full’. Women excel and dominate… Tourism instils a good and honest work ethic – it will not make you rich and famous quickly, but it can be very rewarding.”

With transformation, we will see growth. Growth will strengthen the forces of transformation.