First published by GroundUp

The term “pro-poor” appeared at least 14 times in the City of Johannesburg’s Mayoral Committee Member for Finance’s inaugural budget speech on Tuesday, with the term “forgotten people” or “forgotten communities” appearing 13 times.

Indeed, Rabelani Dagada’s 38-page speech was headed “A Budget for Joburg’s Forgotten People” and on the face of it, offers some respite and a number of promises for the city’s poorer residents.

It is not as yet known whether the respite and allocations will also be offered to poor asylum seekers residing in the city, given mayor Herman Mashaba’s comments following his first 100 days in office.

Rebates

In the first budget speech delivered under a coalition government, Dagada, who is juggling the expenditure of R55.9-billion over the coming financial year, said between ten and 15 kilolitres of free water per household per month would be provided to indigent residents. This is above the national recommendation of six kilolitres.

Other rebates related to property rates, which will increase by 6.2%, but properties valued at under R200,000 are exempt from this rating.

Other property valuation rebates are:

• A 5% rebate for residential sectional title (flats);
• 100% rebate for pensioners earning less than R8,745 per month with properties worth less than R2-million;
• 50% rebate for pensioners who earn between R8,745 and R14,991 per month with property under R2-million;
• 100% rebate for pensioners over 70-years-old if their properties are worth less than R2-million;
• 100% rebate for child-headed households on properties worth less than R2-million;
• 100% rebate for Extended Social Package pensioners living on property worth less than R2-million;
• 100% rebate for residents on the Extended Social Package, who are not pensioners and whose property is worth less than R450,000.

Benefitting the poor

Stressing that the City officials “will not rest” until corruption was rooted out and “every cent of public money” goes to the city’s residents, Dagada proceeded to state how a minimum of 60% of the City’s R8.6-billion capital expenditure budget would be disbursed to benefit the poor.

Of this R5.16-billion capex dedicated to the poor, R162.7-million would go to providing water and electricity connections to informal settlement residents, and R40-million for improving sanitation in informal settlements.

Slovo Park was to be electrified, for which R50m is provided to City Power, the High Court having ordered the City’s previous administration to upgrade the settlement situated next to the Nancefield industrial area. Presumably Slovo Park would be one of the ten informal settlements to be upgraded this financial year, with a further 20 due for upgrading in 2018/19 and 21 in 2019/20, with R574-million in capital expenditure having been set aside for this purpose in the three-year mid-term.

Informal settlements across the city should become a bit cleaner with Pikitup given R482-million over three years to improve services in these areas, with R150-million going their way in this financial year, up from R134-million last year, and the grimy inner city is also included with a further R50-million to enable a third shift to keep the streets clean.

But with 181 informal settlements, a housing backlog of 300,000 and migration into the city slated at 120,000 per annum according to EFF Johannesburg chairman Musa Novela, arguably the most important budgetary allocation was for the housing department, which receives an operating budget of R847-million and a capital allocation of R3.5-billion over the medium term.

Housing

Money for housing, according to Dagada, has been a bit of a bunfight between the ANC-led Gauteng province and the city since it came under DA control last year.

Dagada said the city was provided a R411-million Housing Top Structures Grant from the province while council was led by the ANC last year. He said following the local government elections, province “immediately”reduced the grant to R345-million in their 2016/17 adjustment budget, and has further reduced the grant to R145-million for this financial year.

This would only allow for the building of 1,000 social housing units this year, against a backlog of 300,000 units.

As a result, the city has shifted R66-million to rather provide fully serviced sites for which beneficiaries will be given title deeds and can build their own houses. Land in Univille, Lawley and Ennerdale have been identified to pilot this plan.

It was about achieving “more with less”, stated Dagada.

Asked after the budget presentation whether there was not a danger of the City then using bylaws to restrict the type of houses built and material to be used on such sites, Novela said the EFF took credit for introducing the motion in council and “white and rich people must just stop with those things (bylaws)”.

“You can’t tell me what kind of house I can have. I build it for myself,” said the EFF chair.

The housing department would also use its budget to develop bulk infrastructure in Diepsloot, Poortjie, Dark City, Vlakfontein, Kanana Park, and Drieziek, with housing development continuing in Lehae, Lufhereng, South Hills and Fleurhof.

Dagada said ten informal settlements were indentified for upgrading in the coming financial year, whereas the City only targeted two informal settlements for upgrading last year.

A further 20 informal settlements were to be upgraded in the 2018/19 financial year and a further 21 in the 2019/20 year.

The inner city, which is also an area inhabited by poorer residents, would benefit from a R1.9bn multi-year capital budget allocated to the Johannesburg Social Housing Company (JOSHCO) for the purchase of inner-city buildings and social housing projects in Turffontein, Nancefield, Lufhereng, and Dobsonville.

200 transitional housing units would also be developed in the inner city over the coming financial year, with 1,000 units planned over the medium term, and R87.3-million was to be spent on renewal and upgrading of the Meadowlands Hostel, Helen Josephs Women’s Hostel and Selby Staff Hostel.

Health

The City successfully piloted the extension of operating hours at the Princess Clinic in October last year and has extended operating hours at five additional clinics since April. Together with increasing the staff complement, this increases access to basic health care. With R118.6-million allocated over the mid-term for this project, five more clinics will have extended hours in the 2018/19 financial year and overall, R941-million has been provided for the health department’s operating budget for 2017/18, up from R775-million last year. The department has been given a capital budget of R308-million.

Small business

In line with job creation promises, R4.5-billion was set aside for investment and business facilitation for SMMEs, increasing to R8.5-billion in 2018/19, with a massive jump to R25-billion by the 2019/20 financial year. This was in order to create an enabling environment, particularly for small businesses, to flourish and increase employment.

There was also R10m for artisan development training programmes, R88-million over three years to expand the free WiFi network, and R12-million for commissioning and operating an Alex/Marlboro Automotive Hub and the Alexandrea Sharred Industrial Production Facility.

Goals for growth

Underscoring these plans is an overarching goal to grow the city’s economy by 5% by 2021, a tall order in the context of the country’s 2017 growth rate expected to fall below 1%. But other than broad statements about making the city a competitive investment destination, turning it into “a place where businesses choose to come and set up”, and making it “the vibrant, diverse heartbeat of our country’s economy”, Dagada did not describe how this would be achieved.

Tariff squeeze

While greater efficiency and rooting out corruption would free up money to be spent on residents, in order to increase revenue and finance the City’s calculated ten-year, R170-billion gap in capital infrastructure investment, the middle classes would have to be squeezed tighter.

Tariff increases include:

• electricity increasing by 2.28% for all residents;
• property rates increase by 6.2%
• water, sewerage and sanitation services up by 12.2%;
• removing the six kilolitres of free water per month to all residents not registered as indigent, resulting in an increase of R42.84 on the monthly water bill (this would add R320m to the city’s coffers); and
• a 6.2% increase in the refuse tariff.

Property owners also need to brace for a new property valuation process as the City believes a “significant number of properties” are “considerably” undervalued.

However, Dagada promised that the well-documented billing crisis is being tackled, so at least home-owners can expect to know exactly what they are paying for.

Additionally, he said the previous administration had found the city was losing R5.3bn in revenue per year as a result of customers simply not being billed, signalling potential easing of tariff increases for already paying households in the future. – West Cape News for GroundUp DM

Photo: EFF Johannesburg chairman Musa Novela, pictured on the screen in the Joburg city council’s new R360-million chambers, questions City Speaker Vasco da Gama over an allegedly irregular R500,000 salary hike given to chief of staff at the mayor’s office, Micheal Beaumont, before Mayoral Committee Member for Finance Rabelani Dagada tabled his inaugural budget speech. Photo: Steve Kretzmann/WCN