May 28, 2003
By Les Tilley
THE City of Johannesburg has raised its operating budget from last year's R11,1-billion to R13-billion for this financial year. Taken together with a capital expenditure budget of R1,1-billion, Executive Mayor Amos Masondo points out that "this amounts to an annual investment in the city of over R14-billion" for the financial year 2003/04.
Presenting the budget at the council chamber, Mayor Masondo said: "We have the historic responsibility to cast a solid foundation for a better tomorrow right now."
The consolidated operating budget for the 2003/04 financial year stands at R13-billion, which represents a 15% increase from the current budget. In addition, council intends to spend R1,1-billion on capital expenditure for the year.
Said Masondo: "We will therefore be spending a total amount of R14-billion over this period, which represents a substantial investment in service delivery and infrastructure development for the people of this city."
To finance this investment, the council raises charges from residents, pointing out that it has absorbed cost increases in excess of tariff increases for three years in row. Additionally, Masondo said that city government is "affected by all sorts of external factors like inflation, to an extent by some national government policy decisions, certain international factors as well as the employment and affordability demographics of the city's residents."
Accordingly, the council will increase residential tariffs for electricity by 13,57%, while commercial tariffs will increase by 12,57%. Water tariffs increase by 10% across the board, as will waste removal rates. Assessment rates will go up by 13%. Minor tariffs will generally increase by 10%.
On top of supplying services to residents, the council also provides a social package, which has this year increased by R95-million to just over R450-million. About 278 000, or a third of households throughout the city, will benefit. The cost to Joburg Water for free water will increase from R36-million to R47-million. Similarly, the cost of free electricity will increase from R27-million to R36-million and where applicable, the cost of free refuse and sanitation will increase from R48-million to R58-million.
Masondo said: "The City's tariff policy procedures provide adequate relief for the poor, aged and the unemployed. The proposals for 2003/04 result in an increase in the package from R335-million last year to R450-million in 2003/04. "
The social package includes the following:
- 100% rebate on properties where land value is less than R20 001. This means for example that the majority of the residents in Soweto, Orange Farm, Ivory Park, Alexandra, Eldorado Park, Newclare, parts of Lenasia South and other similar areas do not have to pay assessment rates;
- 6 kl of free water per household per month.
- 50 kwh of free electricity per household per month in all areas supplied by the City's utility, City Power;
- additional subsidies for refuse and sewer for households whose total monthly income is less than R1 100;
- the unemployed, orphans, pensioners, HIV/Aids patients and persons with disability grants, are also catered for.
"This very substantial allocation is an indication of the seriousness with which Johannesburg approaches the problem of poverty and social deprivation. However, there is always a risk whenever there is any kind of price hike that some consumers will find it harder to pay their accounts. Council is always conscious of this and strives for affordability for its citizens."
The mayor concluded his budget presentation by saying the process has been guided by the Joburg 2030 strategy and underpinned by the Integrated Development Plan, which was also presented to council today.
He said: "On 5 December 2000 we undertook to reinvent and reinvigorate the city, and to set it on a new path. We now have the basics right and look set to engage to a higher gear in our quest to create a better life for all."
