Joburg budget embraces growth

Published May 22, 2013

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Johannesburg - The City of Johannesburg's 2013 budget was aimed at creating growth and an inclusive spatial environment, the mayoral committee for finance said on Wednesday.

“The budget presented today will result in fundamental changes to the financial structure of Johannesburg, and enable us to change our course towards the type of city we desire,” committee member Geoffrey Makhubo said in a budget overview speech prepared for delivery.

“We desire a city that is developmental in nature, spatially integrated and united, liveable, embraces inclusive economic growth and allows us to remake ourselves as a city.”

The operational portion of the budget was R36.3bn, while R7.5bn was allocated to capital expenditure.

Makhubo said the self-funded part of the budget would grow from an average of 39 percent now to over 65 percent.

He said this year the city's finances strengthened in spite of the difficult global and regional economic environments.

“It is on the base of the surplus of R4.9bn and cash equivalents of R2.2bn achieved in 2012, that we are able to increase our capital budget by over 60 percent for the 2013/14 financial year,” Makhubo said.

The city was embarking on measures that would break with apartheid spatial planning to build a future Johannesburg characterised by equity, accessibility and sound economic principles.

The Corridors of Freedom project and its associated transit-oriented development would see dense urban areas connected with transport corridors for the movement of people and goods.

“These corridors will be developed to support inclusive, high-density, mixed-use developments to reduce commuting times and costs,” he said.

The city's sustainable services cluster would lead the planning and implementation of the Corridors of Freedom, and was allocated R21.9bn, more than half of the total operating budget. Its capital budget, over three years, was R17.3bn.

In the same cluster, City Power received an operating allocation of R13.2bn and a capital budget of R6.8bn.

Joburg Water's operating budget was R5.9bn, with R3.7bn for capital projects in areas including Orange Farm, Doornkop West, Protea Glen, Roodepoort and Diepsloot.

The housing department was allocated an operating budget of R634.1 million and a capital budget of R2.4bn.

The human and social development cluster received R4.8bn in operating expenditure and a capital budget of R1.4bn over three years. Medium-term capital projects included upgrading community facilities such as recreation centres, libraries and sports grounds.

“In the health sector we are providing for the construction of the new Freedom Park clinic in Devland as well as substantial upgrades to various clinics across the City,” Makhubo said.

The public safety operational budget grew by just over five percent to R2.3bn, with a capital budget allocation of R432.2

million. This cluster would focus on the prevention of violent crime and traffic management as well as facilitating community outreach programmes.

The economic growth cluster received an operating budget of R3bn with a R9.1bn capital budget.

“...The projects... are designed towards stimulating economic growth through targeting labour-absorbent activities as well as the promotion of innovation through 'green economy' initiatives.”

Makhubo explained that water and electricity tariffs were largely outside the city's control as external agencies, such as Eskom, the National Energy Regulator of SA (Nersa) and Rand Water, determined these.

The structure of the electricity tariff was changed to absorb some of the increase's impact, making the new tariffs “more than comparable with all other metros in the country”.

The average increase for electricity for 2013/14 was 7.32 percent, lower than the eight percent Eskom increase approved by Nersa.

The water tariff increased by 7.32 percent, on average, in line with the Rand Water increases.

Residents were reminded that the cost was linked to the amount of water or electricity used, so that the higher the consumption, the higher the cost per Kilowatt hour of electricity, or litre of water.

“We are keenly aware of the fact that, in the current economic environment, households are faced with very real challenges with regards to disposable income and our tariffs need to respond to these pressures,” Makhubo said.

The budget provided for a number of concessions to assist households in affording essential services.

For example, the first R200,000 of the value of residential properties was exempted from rates, while pensioner owners with a monthly income less than R6000 would be given a 100 percent rebate.

Pensioners earning between R6000 and R11,000 qualified for a 50 percent rates rebate.

Animal protection organisations and those involved in youth development programmes were fully exempted from rates, while private sports clubs received a 40 percent rebate. - Sapa

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