The MMC for Finance and Economic Development, Clr Doctor Xhakaza, kept the running theme of the metro, Building a Local Economy That Grows in the Hands of the People, when delivering the metro’s budget speech on Thursday.
Delivered at the Germiston Civic Centre, the speech emphasised the metro’s pro-poor agenda, tariffs, social packages and gentrification of townships and towns for future economic stimulation.
In a direct response to the shocking statistics revealed by Stats SA, recently, stating that 6.2 million South Africans are unemployed, Xhakaza said, “At metro level, the rise of unemployment, the rising fuel and energy costs and consumer inflation continue to exert pressure on the revenue generation and collection levels of the municipality.
“This calls for innovative ways to increase revenue base and policy amendments that are responsive to the plight of indigent households, not omitting stringent credit control measures to those consumers who can afford to pay but choose not to.”
Xhakaza presented an annual budget of R48.9-billion for the 2019/20 financial year, with an operating expenditure of R41.5-b, which has increased by R3-b.
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The operational expenditure is funded as follows:
• Revenue generated internally: R32.82-b
• Operating grants: R5.9-b
• Capital grants: R2.78-b
“The metro’s capital budget will be growing by R900-m from R6.5-b in the current financial year to R7.4-b in the 2019/2020 year, a clear determination by the metro to invest on capital and infrastructure projects,” said Xhakaza.
This amount will be funded as follows:
• Revenue generated internally: R884-m (11 per cent)
• Government grants: R2.8-b (38 per cent)
• Loans: R3.74-b (51 per cent)
The MMC cautioned against the relatively high proportion on loans as a source of funding.
“Increasing borrowings impact negatively on the operating budget by depleting the cash reserves due to loan repayments and interest thereof,” he said.
“This paradox requires even more prudent management of the metro’s finances, striking a balance between the need to fund service delivery and financial sustainability.
“Nonetheless, it remains critical for the metro to invest in its infrastructure and productive sectors to progressively meet the needs of the communities and grow the economy.”
On the social package the MMC reiterated their pro-poor agenda adopted when the executive mayor Clr Mzwandile Masina came into office in 2016.
“Our agenda would be skewed if we do not continue with our noble gesture of a social package for the most vulnerable and indigent members of society,” he said.
“Once again, the metro will shoulder the cost of R4-b for the social package, an increase of R300-m compared to the previous finical year.”
The complete package of indigent relief includes a 100 per cent rebate on assessment rates, free refuse removal, first 100kWh of electricity per month free, first nine kilolitres of water and sewer per month is free, special rates on emergency services and free indigent burial.
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In efforts to re-industrialise the metro, Xhakaza allocated R847-m over the Medium Term Revenue and Expenditure Framework (MTREF) with R296-m for the 2019/2020 financial year for economic development.
“This allocation has been deliberately allocated to strategic key projects including the Airport Precinct, OR Tambo, Springs Inland Port, Ekurhuleni Business Centre and strategic urban developments like Greenreef and Riverfields Mixed-Use Developments,” said Xhakaza.
“Furthermore we are spending R351-m over the MTREF on, among others, the Kathorus Automotive City, Reiger Park Enterprise Hub, Ramaphosa Vocational Skills Centre, as well as the Labore and Wihoek industrial parks.”
In the Department of Transport Planning and Provision the metro will invest R1.8-b in the MREF and R640-m in the new financial year.
This investment is intended for the completion of upgrading taxi ranks, the roll-out of the integrated public transport system and non-motorised transport infrastructure.
To re-urbanise the metro, Xhakaza has allocated R4.6-billion in the MTREF and R1.6-b for the 2019/2020 financial year to the Department of Human Settlements.
“Turning to the Energy Department, we have set aside a significant amount to ensure that we keep the lights on at all times,” said Xhakaza.
“A total of R2.29-b has been set aside for the MTREF and R706-m in the new financial year.
“Furthermore, we have set aside R3-b for the MTREF and R892-m for the new financial year, for the maintenance of our electricity infrastructure and the refurbishment of substations in areas in Germiston, Edenvale and Kempton Park.”
EMPD and Ekurhuleni Disaster and Emergency Management (DEMS) were allocated R914-m for the MTREF and R275-m for the new financial year.
The Waste and Environmental Management Department will receive R1.4-b in the MTREF and R432-m in the 2019/2020 financial year for key projects.
“We must continue in our pursuit of becoming a digital city,” said Xhakaza.
“As such, we are investing R2.4-b over the MTREF in the area of Information and Communications Technology (ICT) with R952-m set aside for the new financial year.”
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Info box:
MMC for Finance Economic Development Doctor Xhakaza tabled the 2019/20 Budget with the following highlights:
Tariffs:
• Proposed an increase of 7.5 per cent for assessment rates, consistent with the Consumer Price Index (CPI) of 5.2 per cent with an additional 2.3 per cent for real growth.
• Electricity tariffs will only be increased by between 13.07 percent and 13.87 percent depending on the usage, whereas earlier in March the National Electricity Regulator of South Africa (Nersa) announced an increase of 15.63 per cent.
• Water tariff will increase by 15 per cent, which is equal to the increase pronounced by Rand Water.
• Sanitation tariffs will increase by 11 per cent and the refuse removal tariff will increase by 7.5 per cent for all users due to the main cost drivers of the service.
• Though there has been no tariff increase on cemetery and crematoria over the past five years, due to the need for maintenance, a nominal tariff increase of 5.2 per cent for residents, and 6.5 per cent for non-residents was effected.
Energy:
•Electrification of informal settlements has been awarded a budget of R732-m for the Medium Term Revenue and Expenditure Framework (MTREF) and R202-m for the next financial year.
Refurbishment of towns and townships:
• Germiston CBD: R613-m for the MTREF and R188-m for the financial year.
• Kathorus: R75-m for the financial year.
Cleaning of the metro:
• R305-m over the MTREF for waste removal, grass cutting, litter picking and tree felling.
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