Treasury’s squeeze: Free State municipalities fail to pay salaries

Six Free State municipalities have failed to pay employees’ salaries, highlighting the deepening financial crisis facing local government in the province. The six are part of 16 municipalities in the province thatNational Treasury withheld its equitable share allocations. Equitable share allocations are unconditional financial transfers from national government revenue given to provincial and local governments.

This was done to enforce fiscal discipline, address massive unauthorised and wasteful expenditure, and force local councils to pay overdue debts to major creditors like water boards and Eskom. The South African Municipal Workers’ Union (SAMWU) has blamed Treasury’s decision for the failure and delay to pay salaries. The union noted that the municipalities that have communicated their inability to pay salaries or confirmed further delays are: “When National Treasury announced the withholding of the July 2026 equitable share, SAMWU warned that the decision would have serious and entirely foreseeable consequences.

“We cautioned that municipalities would be unable to pay workers’ salaries, pension and medical aid contributions, honour third-party deductions, pay service providers and sustain the delivery of essential public services,” said the union. “National Treasury nevertheless assured the country that its decision would have no impact on service delivery. That assurance has now been exposed as dangerously detached from the lived realities of municipalities, workers and communities.” The union added that workers were supposed to receive their salaries on 24 July 2026, including scheduled salary increases.

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However, the employees were left without their salaries and without the increases. “Workers had planned their lives and financial commitments around receiving these salaries and increases. They now face the double injustice of being denied both the wages they have already earned and the salary adjustments they were entitled to receive,” said the union.

The union further noted that workers in some municipalities in the province have not received salaries dating back to June 2026, with Kopanong Local Municipality not giving any communication to employees. “SAMWU has also received reports that workers at Kopanong Local Municipality have not been paid, despite the municipality having issued no formal communication explaining the situation to employees.”

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