Honourable Members, our Constitution requires an equitable division of revenue between the spheres of government, and sets out the criteria that govern this division.

The funds available after providing for debt service costs and a contingency reserve increase by 6.9 per cent to R1.24 trillion next year, and are projected to rise to R1.43 trillion in 2019/20.

Over the next three years:

The division of revenue involves a substantial redistribution of resources from the wealthiest areas in our country – where most of our taxes are raised – to lower-income communities and households. The allocations to predominantly rural municipalities are twice as large, per household, than those to metropolitan councils.

This redistribution of resources is an enabling foundation for a broader transformation of services and opportunities in our cities, towns and rural areas. Development also requires effective management of public services and promotion of enterprises and income-generating activities.