The changes announced by Cabinet for Limpopo's Provincial Government has been welcomed by the South African Property Owners Association (SAPOA). Five departments have been targeted in this “clean-up” move by Cabinet. This was necessary after the Provincial Government was facing bankruptcy in terms of section 100 (1) (b) of the Constitution since December 5, 2011.
The affected departments were; education, treasury, public works, health and roads and transport.
Neil Gopal CEO of SAPOA welcomed the handover to the newly appointed Provincial premier, Stanley Mathabatha. Gopal is still however perplexed by the lack of Cabinet to intervene in what is seen as wholesale mismanagement of R2 billion, which was incurred by the previous administration through largely theft and wastage, with an overdraft of R1.7 billion.
The corrective management measures taken by government has seen the province show a credit balance of R 3.3 billion as at July 2013, since the inception of the new local government. It is a slow process to recovery and it is hoped that the premier will continue to maintain measures in place to counter the mismanagement as this is a burden which costs taxpayers dearly.
Taxpayers and investors alike are frightened off by this mismanagement. One such tax burden is rate increases of up to 40%. This affects property owners’ value in the long run as this burden impinges on their disposable income, and some residents and businesses could be forced to sell up and find alternative places to live and conduct their business.
Tenants are being saddled with lower profit margins as electricity and rates directly impact on operating costs says Gopal.
The closure of businesses adds to higher unemployment figures which lead to an increase in crime, all factors which negatively impact on investment prospects for the province.
Gopal is investigating the illegal land use which is rife in the Province at present.