Draft budget to drive economic transformation

2017-04-11 06:01

THE eThekwini Mayor Zandile Gumede tabled her maiden draft budget for the 2017/18 financial year at a full council meeting on Thursday, 30 March.
The City’s consolidated R45 billion draft budget for the 2017/18 financial is informed by the municipality’s long-term financial strategy with emphasis on affordability and long-term sustainability focused on alleviating poverty and social imbalances through job creation, youth development and advancing the economy by creating an enabling platform for business to flourish.
And in keeping with the City’s commitment to increase communication and consultation with communities, both political and administrative officials will embark on a public participation process on the budget, Mayor Gumede said.
This will allow every resident to have the opportunity to scrutinise the budget, engage with officials and provide their input before the budget is finalized. Regional budget hearings will be held during the months of April and May. Details of these hearings will be published soon.
Gumede in her address referred to the budget as one that is in keeping with the promises made in her inaugural speech and would drive radical economic transformation as well as fast-track service delivery in the City.
“We believe this is a very well balanced budget in terms of addressing the triple threat of poverty, unemployment and inequality while on the other hand also building business confidence in terms of retaining and expanding existing businesses and attracting new investors to help grow our rates base.”
The 2017/18 draft budget comprises a capital budget of R7.5 billion and an operational budget of R37.5 billion (increased from R33.1 billion in 2016/17 financial year), which funds the continued provision of services provided by the municipality.
The growth of the operating budget is mainly due to the cost of addressing service delivery backlogs, the cost of bulk purchases of water and electricity, repairs and maintenance of infrastructure, impact of capital spending on operating expenditure and employee related costs as a result of filling of vacancies and provision for salary increase.
The capital expenditure is budgeted to rise to R7.3 billion in 2017/18 and thereafter to R 7.8 billion by 2019/20.
With over 75% of the municipality’s residents having access to basic services, the municipality has been a front runner of accelerated delivery for many years and continues to put significant resources and effort into infrastructure delivery in order to eradicate existing backlogs. Despite the significant roll-out of basic services, the service delivery backlogs remain huge.
Taking cognisance of the bleak economic climate, austerity measures have been applied in order to address the initial budget deficit and ensure reasonable levels of tariffs with a basket of services with an overall increase of less than 6% which is below inflation and also to confirm to National Treasury cost containment guidelines. However, some of the increases have been unavoidable. As with the bulk water tariff increase by the Umgeni Water Board was 15%.
The proposed tariff increases for the 2017/18 financial year are:
Rates is 6.9% on average, an increase of 1.88% for electricity, 15% for domestic water consumers, 17% for business water consumers, 9.9% for refuse removal, and also 9.9% for sanitation.
With the City’s commitment to fast track service delivery and provide basic services our free basic services package, pensioners, child-headed households, disability grantees and the medically boarded are exempt from paying rates on the first R460 000 of their property value. Residential Properties valued up to R230 000 (previously R185 000) will be exempt from paying rates. All other properties valued above R230 000, for the first R 120 000 of value no rates will be charged.
The first 6kl of water is free to households with property values under R250 000.
The first 50kwh of electricity is free to residents using less than 150kwh per month in Eskom reticulated areas. The first 65kwh of electricity is free to residents using less than 150kwh per month in eThekwini reticulated areas. The first 6kl of effluent disposal is exempt for all properties with values under R250 000. In addition, a free basic service is also available to indigent consumer units with VIP’s, urine diversion toilets and in informal settlements serviced by means of a toilet/ablution block within 200 metres.
“We believe that we are on the right path as the international Mercer quality of living survey recently named our municipality the best South African city to live in for a third consecutive year,” she added.
- Supplied.

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