The Johannesburg council has passed its R68.1bn budget, averting SA’s richest city from being placed under administration a day before a deadline to do so was set to lapse.
The clock was ticking for the city, which faced having an administrator appointed to run the metro until a new council was elected if it did not pass the budget, after having failed to do so before the start of the new financial year.
That year started on July 1 and the city failed to pass a budget after a council meeting was postponed to allow for further political consultation.
The provincial government gave the city until Friday to rectify this, as the finance MEC in Gauteng had to approve its expenditure in the meantime, as the city could not spend any money without a budget. The consultations, which took place over the past month, finally bore fruit on Thursday when all political parties in the council, with the exception of the EFF, reached across the aisle to pass the budget.
The council is governed by a minority coalition led by the ANC. While the DA, which is the second-largest party in the council, is on the opposition benches, it supported the budget following a week of intense consultations.
Finance MMC Jolidee Matongo tabled a dramatically different budget from that proposed in March. It includes slashing the capital expenditure budget to close to R1bn from the proposed March budget to the final, agreed R7.5bn for the 2020/2021 financial year — which is even lower than the R7.8bn in the 2019/2020 budget.
“It is clear that the Covid-19 pandemic has turned the global economy upside down, and the City of Johannesburg has not been an exception,” Matongo said, adding that the ripple effects of the consequent economic meltdown and the lockdown, are already evident in the decline of the city’s revenue collection record since April.
“The tariff-setting process, which was presented through a public participation engagement, took into consideration the likely impact the initially proposed tariff increases had on the local economy, businesses and residents,” Matongo said. The city accordingly revised the proposed rates and tariffs downwards from the draft budget.
Matongo said the property rates tariff will be reduced from the proposed 4.9% to 4.0%; the water tariff will drop from the initial proposal of 8.6% to 6.6%; and the electricity tariff goes down from 8.10% to 6.23%.
He also said that, following public concern and suggestions by residents to the proposed tariffs, the city took a decision to withdraw the proposed fixed charges of R200 for residential and R400 for commercial pre-paid electricity.
Salary increase negotiations
On salary increases, the city has budgeted for a 6.25% increase for municipal workers, but this is subject to negotiations between the unions and the SA Local Government Association Bargaining Council.
Matongo said political parties have to discuss the proposal by the DA that councillors get no salary increases in this financial year. If all parties agree, he will table an adjustment budget to that effect, Matongo told Business Day after the meeting.
Currently, the city has budgeted for a 4% salary increase for councillors.
Leah Knott, DA caucus leader in Joburg, said several far-reaching interventions proposed by the party were included in the final budget following “extensive” negotiations, which ensure that residents do not bear the brunt of Covid-19, while placing an emphasis on economic upliftment.
“There is simply no time to waste on politicking and mudslinging now. The DA’s priority is to get relief to our residents and to urgently bolster our healthcare response,” Knott said.
She said another major concern, aside from being placed under administration if they did not pass the budget, was potential interruptions to service delivery. “At a time when hygiene is a matter of life and death we cannot afford interruptions in water and sanitation services. In a time when businesses are fighting to weather the economic storm we cannot afford power outages.”
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