Abstract
There are shared thoughts among scholars that fiscal decentralisation is a solution to the problems of poor public services in the local government. Fiscal decentralisation is the dispersal of financial responsibility to lower levels of government or other spheres of government. This study highlights various discourses on local self-government, especially fiscal decentralisation processes, local revenues, and the New Local Government philosophy of local government reform in South Africa. This research interrogates the importance of fiscal decentralisation as a tool to facilitate greater effectiveness and efficiency in local government. A qualitative research approach was used to obtain information. Through the review of the literature and selected official government reports, the study found that development in local government can be achieved through the effective decentralisation of responsibilities, fiscal policy management, fiscal decision-making authority and sufficient resources, including revenue collection authority to local authoritiesFiscal decentralisation requires a concerted effort in capacity-building and institutional fiscal reform and should, therefore, be associated with the strengthening of local authorities. Decentralisation can occur at the level of fiscal expenditures and revenues creation or sourcing. This paper emphasises the importance of fiscal decentralization and the New Local Government philosophy of local government reform. Keywords: Fiscal Decentralisation, Local Revenues, New Local Government, Finances
Highlights
In most post-colonial states, fiscal decentralization has been a subject of acute administrative debates
It may refer to a broad range of transfers of the locus of decision making from national governments to provincial, municipal or local government, allowing local participation of people and local authorities
There is an increased tendency by most post-colonial or post-apartheid government to centralise authority and power at the central level or national sphere of government, usually for political reasons than administrative. This is the case for countries that are led by former liberation movements that are dictatorial or that possess such characteristics
Summary
In most post-colonial states, fiscal decentralization has been a subject of acute administrative debates. Fiscal decentralisation involves the dispersal of financial responsibility to local government For this to happen successfully, the local government must have sufficient revenue base either collected or levied locally or obtained from the national sphere of government. This would result in granting local government adequate decision-making powers to determine expenditure. Fiscal decentralisation involves the fiscal utilisation responsibility, local income sources, and the financial decision-making powers, devolved to local municipalities, to determine their local expenditures and revenues. 8% of the municipalities managed to obtain clean audits and irregular expenditure at the municipal level was to the tune of R21, 243 billion (Auditor-General, 2019) This is a challenge that fiscal decentralisation has in South Africa.
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