R400-million debt — national, provincial governments don’t pay their Joburg City bills
Big squeeze for Johannesburg residents as Johannesburg Budget announces an increase in electricity tariffs by 7.47%, water by 9.75%, sanitation by 9.75% come 1 July.
National and provincial governments owe the City of Johannesburg R400-million in unpaid rates and taxes, the city’s finance MMC Julie Suddaby revealed, tabling a R77.3-billion budget on Wednesday, May 25.
The city is struggling with debt, and while it has collected R300-million from national and provincial government debtors in five months, tariffs go far beyond the current consumer inflation rate of 5.9%. Electricity tariffs will increase by 7.47%, water and sanitation costs by 9.75% and refuse removal by 5% as of 1 July.
Electricity and water outages are regular occurrences in Johannesburg, while the inner-city and surrounds are often a tip of uncollected garbage.
Power cuts are the biggest beef of the city’s six million residents, and electricity infrastructure will get a R1.2-billion budget for the year — a tiny amount given that City Power says it will take R26-billion to fund an essential overhaul. The multi-party government, which took office in November 2021, inherited a broken city, said Sudabby.
“Sadly, the residents of Johannesburg have become hopeless in their discontent,” she said. Unlike many municipalities, the city gets few conditional grants from the central government, and it funds its own operational and a large chunk of capital expenditure from its rates base.
But semigration, remote working and Covid-19 took a scythe to the city and revenue collection dipped to its lowest-ever levels. Collections are recovering with R4.2-billion collected in March, up R1.6-bn year on year. Johannesburg’s road networks are peppered with potholes and other holes dug up by Johannesburg Water. The Johannesburg Roads Agency will get R1.1-billion for capital expenditure, while R930-million goes for water and sewer infrastructure.
The Durban floods have revealed how successive ANC governments failed to maintain drainage systems to the detriment of that city. Johannesburg is one flood away from a similar fate as many roads end up water-logged after rains because storm-water drains have not been maintained.
Sudabby has committed R4-billion to public transport, with R519-million for capital expenditure, including the re-cabling of traffic lights. Johannesburg’s traffic light network is more often out than on. She delivered one of the most honest city budgets in recent years, saying:
“[Johannesburg] is a city of broken promises. Broken streetlights and broken traffic lights. Broken power substations and sewer pipes. Our residents are not fooled by comforting clichés and catchy phrases.”
Ten highlights in the city budget
- Pension rebates on rates on property values R2.5-million and below
- R1.3-million for park rangers to keep parks safe
- R200-million for 20 fire engines
- The city will revitalise municipal courts with a dedicated prosecution unit for by-law violations
- 17,504 public work opportunities
- 2,252 new houses and R600-million for informal settlement upgrades – over three years
- 2,500 low rent and rent-to-buy units and 895 social housing units
- 500 frontline staff to be trained in customer service
- 500 WiFi hotspots in public spaces
- The city will support 14,500 small and medium-sized businesses. DM