Joburg cuts budgets to rejig spending
The City of Johannesburg, which receives the biggest budget of all the country’s metros, has adjusted both its 2017-18 capital and operational expenditure budgets downwards.
The capital expenditure budget was cut by R1.2bn from R8.6bn and the operational expenditure budget by R459.1m.
The adjusted budget comes a day after Finance Minister Malusi Gigaba tabled a national budget that reduced allocations to the country’s provincial and local governments.
"If we are to steer the city into truly sound financial waters, we have to make prudent decisions which will unfortunately limit spending in some respects while progressively addressing our most pressing challenges," mayor Herman Mashaba said on Thursday.
He said the cuts were made to ensure the continued viability of the city to guarantee essential service delivery. "We cannot, in good [conscience] repeat mistakes committed by the ANC and spend money that the city does not have."
The proposed adjustment budget was passed by the Joburg city council despite being opposed by the ANC, the African Independent Congress and the Patriotic Alliance.
Mashaba leads a coalition-led government that took over from the ANC in 2016.
Johannesburg’s envisaged total revenue, excluding capital transfers and contributions, was also adjusted downwards from R48.59bn to R47.67bn.
The biggest contributor to the adjustment of revenue in the original budget was service charges. The amount generated from service charges was originally budgeted at R28.7bn, but had to be reduced by R926m.
The city’s billing system has been in turmoil for years and one of the promises Mashaba made when he took office was to clean up the system. ANC councillor Oupa Ngwenya ascribed the adjustment tabled on revenue to the undercollection of revenue by City Power and Joburg Water.
City Power generates about 40% of the metro’s revenue.
The report on the adjustment indicated that departments and municipal entities had requested an additional budget of R3.8bn for the 2018-19 and 2019-20 financial years.
However, the requests would only be considered during the 2018-19 to 2020-21 budget process because of budgetary constraints.
Axed finance mayoral committee member Rabelani Dagada raised concern about the state of the entities in 2017.
Patriotic Alliance councillor Lloyd Phillips said on Thursday the executive had been warned that the initial budget was overstated by about R1bn when it was tabled in 2017.
Other adjustments approved included an additional R87m to the Johannesburg Social Housing Company for it to continue acquiring buildings in the inner city. A total of R10.8m was allocated for providing temporary emergency accommodation in the inner city.
City Power has also been allocated R214.7m for the electrification of housing developments at Fleurhof, South Hills and Riverside.