The affordable education loan option
Johannesburg - Residents alone are R9.36 billion in arrears to the City of Johannesburg. And it’s the same households that are the biggest culprits, compared to any other city or town in Gauteng defaulting on their municipal rates and services.
Businesses follow with a debt of R7.4bn, while government departments owe R358m.
The biggest amounts owing are for electricity at R4.97m, water R4.4m, rates R4.3m and sanitation R2.3m.
In total, the City of Joburg is owed R17.17bn over an unspecified period, while, for the quarter ending June 30 alone, a total of R2.89bn is owed.
These figures were released by the Treasury this week in the latest provincial gazette dealing with municipal financial statements.
Collectively, Gauteng municipalities are owed R29.7bn in debts older than 60 days, and R37.7bn in total
And this debt is growing every year.
Compared with the previous quarter, from January to March this year, the debt has grown by 2.85 percent, and by 6.2 percent since the end of December.
According to Fred Nel, DA member of the Gauteng provincial legislature and spokesman for local government, the amount for debtors older than 60 days is important as this becomes difficult for municipalities to collect and stays on their debtor books for years.
“Disconcerting is the fact that the three metros in Gauteng - Joburg, Tshwane and Ekurhuleni - are owed 83 percent of all the debt older than 60 days. Joburg’s share of the total consolidated debt over 60 days is 45 percent, Ekurhuleni’s is 25 percent and Tshwane’s is 14 percent.”
Nel said the significance of municipal debt was its impact on potential service delivery.
“With effectively R29.7bn being taken out of the total municipal budget in Gauteng, this increases the pressure on provincial and national government to fund municipalities to deliver on their constitutional mandate.
“The increase in older debtors is also an indication that the support programmes initiated by the province to assist municipalities to improve revenue collection have failed.
“A serious rethink is required as to how municipal debt collection can be improved to unlock the delivery potential of this massive debt.”
Nel said a failure to improve revenue collection in the province would only lead to a weakened financial position at municipalities, that would inevitably hamper service delivery.
The Joburg council said it was unaware of the Treasury report, but during the 2013/14 budget speech in May, mayor Parks Tau said financial management had improved, with the city having a surplus of R4,9m and cash equivalents of R2,2bn from last year
He noted that the city had been negatively impacted by the poor economic situation and difficulties faced by many households in settling debt.