Salga bemoans ‘unintended’ impact Aarto will have on municipalities

The South African Local Government Association (Salga) has voiced its concerns about “unintended consequences” on municipalities from the implementation of the controversial Administrative Adjudication of Road Traffic Offences (Aarto) Act.

It said on Monday this includes removing the adjudication function of traffic fines to national government.

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Read: RTIA refutes ‘impact of Aarto on municipality income’ claims

It added that the introduction of Aarto must be seen through the context of the existing distribution of national revenue between the three spheres of government, including the distribution of vehicle-related functions.

It highlighted that municipalities receive only 9% of the national revenue when they perform over 50% of the functions.

“This puts pressure on municipal finances and their financial sustainability,” it said.

“Even though the assumption was that municipalities would collect the majority of their revenue from service charges, most households cannot afford such services and the resultant debt to municipalities continues to grow exponentially.”

Salga said it has submitted its concerns to the Department of Transport and the Road Traffic Infringement Agency (RTIA) and “neither has provided a clear business case indicating the financial impact on municipalities and how adverse implications will be addressed”.

The association said it continues to engage with both parties through intergovernmental relations structures that have been established.

One good thing …

“Fortunately, some of the key decisions on financial matters are not dictated by the body of the Aarto Act and its amendment but by regulations that can be amended without going through a long process of amending the legislation,” it said.

Salga was responding to a Moneyweb request for comment after a Swellendam municipality report tabled last month claimed that the implementation of Aarto will have significant financial implications and could result in municipal traffic services shutting down.

Read: Aarto implementation could result in municipal traffic services ‘shutting down’

The RTIA said last week that the implementation of the Aarto will result in an increase rather than a decrease in income for municipalities from traffic infringements.

In terms of the Aarto Act, 50% of traffic fine revenue will be diverted from municipalities to the RTIA when the act is implemented.

However, the RTIA claimed the implementation of the Aarto Amendment Act will result in municipalities collecting all the revenue that is due – barring, for example, instances of successful representations by infringers electing to be tried in court on a charge of having committed the alleged offence – as opposed to the 5% to 12% revenue collection performance they are currently experiencing.

The date on which the amendment act will be implemented nationally has not yet been gazetted by President Cyril Ramaphosa.

The road safety aspect

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Salga added that it generally supports all efforts to reduce road accidents, particularly as they lead to injury and fatalities, but stressed that all measures taken to reduce accidents must be done in a manner that does not adversely affect any sphere of government.

The association stressed that South Africa’s constitution assigns vehicle licensing functions – vehicle registration and driver’s licences – on a concurrent basis between the national and provincial governments, which collect over R12 billion a year.

“Municipalities perform these functions as agencies of provinces with a maximum of 21% of the revenue being collected,” according to Salga.

“Almost all municipalities operate at a financial loss in performing these functions. Municipalities operate at a loss on vehicle-related functions.”

Salga said municipalities were able to collect some of the revenue on vehicle fines and this was a steady source of income.

Adjudication

However, Salga said the introduction of Aarto takes away the function of adjudication of traffic fines to the national government.

“It is significant to note that this was a function that municipalities were performing,” it said.

“With the function appropriated by the national government, the national government through the RTIA adjudicates the fines and makes decisions on the size of the fine and the discount.

“Furthermore, payments made after the grace period are only to RTIA and not the respective municipality where the fine was originally issued.

“Municipalities must also pay a handling fee to RTIA on the same fines that municipalities were handling by themselves,” according to Salga.

However, the RTIA told Moneyweb that municipalities receive all the fines that are paid within the 32-day discounted period, but where an infringer pays the fine after 32 days, they pay the full amount of the fine to the RTIA, which the municipality and the RTIA then share in terms of a 50/50 split.

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Source: moneyweb.co.za