Cape Town - Mayor Geordin Hill-Lewis has called on Finance Minister Enoch Godongwana not to cut the budget for housing grants.
Hill-Lewis, at Thursday’s council sitting, spoke out against the expected nationwide cuts to housing grants in Godongwana’s medium-term budget policy statement in Parliament next week.
“Both our urban settlements development grant and our informal settlements upgrading grant have been earmarked for substantial cuts amounting to more than R100 million to be slashed directly from housing and informal settlement budgets servicing our most vulnerable communities.
“We in Cape Town object in the strongest possible terms to these anti-poor budget cuts. We also anticipate top slicing of the equitable share to provinces and local government in the forthcoming medium-term budget policy framework.
“The census confirms that the Western Cape has rocketed up the population rankings to be the second most populous city – just 100 000 people behind Joburg.
“In fact, Cape Town will soon overtake Johannesburg as South Africa’s biggest city, and will very soon cross over the 5 million-person mark,” Hill-Lewis said. “In accordance with these figures, our equitable share should be increasing, not decreasing.
“If there are to be cuts, as there clearly need to be, these should come from government departments that serve no meaningful purpose – and there are several of those – or from unnecessary expenditure like R3.5 billion for VIP security for ministers.
“Expenditure that is aimed directly at improving the lives of the poor, upgrading services in informal settlements, delivering housing, or building essential infrastructure should be protected at all costs.
“I call on the national government to consider the plight of the people directly affected by these cuts, and to reverse this regressive decision.
“I appeal today to both the finance minister and the president: ‘You have an imminent opportunity to demonstrate your commitment to building the kind of South Africa that we are trying to build here in Cape Town’ – progressive, pro-poor and pro-growth.
“I understand the financial constraints facing the minister in this mid-term budget, and that there is no magic money tree for him to harvest. But I also know that the cuts proposed so far are absolutely the wrong decision,” said Hill-Lewis.
He also mentioned that the national social housing subsidy regime “has not changed in five years, has not kept pace with inflation, and is not enough to really ignite the viability of the social housing sector”.
“It was very encouraging when the Human Settlements Minister, Mmamoloko Kubayi, announced in March this year that this subsidy regime would be increased, but it is now almost November and we’re still waiting for this increase to be gazetted.
“I do appreciate the National Social Housing Regulatory Authority committing additional subsidy support to the developer of the Pine Road and Dillon Lane projects in Woodstock, which is land the City has already released for development.
“This will hopefully be enough for construction to go ahead on these two projects, both of which are in the inner city,” Hill-Lewis said.
“But as National Treasury’s own outlook for the social housing sector shows, project viability is severely constrained across the board, making raised subsidies a must.
“It is crucial that the promised subsidy increase materialises soon, and the mid-term budget speech to be delivered in Parliament next week is the perfect opportunity for the Finance Minister and the national government to formalise that commitment.”