A Budget that builds hope for all

31 May 2023

Budget Vote Speech

Speaker

Colleagues

Members of the public and guests

Members of the media

Good Morning, Molweni, Goeiemôre, Assalamu alaikum.

I would like to express my deepest condolences to the families of the children who tragically lost their lives in the vehicle accident in Mitchells Plain yesterday morning. I pray that you find strength and comfort in these difficult times.

Speaker, it is my pleasure and my honour to table today, for adoption, the City of Cape Town's Budget for 2023/24. This follows two months of extensive engagement with City stakeholders, partners, residents, the business sector, NGOs and religious organisations.

When I tabled this draft Budget at the end of March, I said that this is a budget with which we can build hope in Cape Town. At just over R70bn it is, by some distance, the biggest budget in our city's history, and the scope of future planning that this enables will set Cape Town on a path of growth and progress for many years to come.

Our budget team, which includes some of the smartest and most hard-working people in the City, managed to strike a perfect balance between ambitious forward planning, the immediate needs of the city's most vulnerable residents, and respect and understanding for the increasing pressures felt by ratepayers.

While many other metros and municipalities are struggling to keep up with service delivery demand and the substantial investment in infrastructure that this requires, we have just tabled a record R11bn capital expenditure budget, and we have clear plans and targets to stay ahead of the rate of population growth and urbanisation in Cape Town.

I have mentioned this before, and I will do so again because it is significant: We are spending considerably more on infrastructure than the other two big cities, Johannesburg and eThekwini. In fact, over the next three years we will invest more in infrastructure than those two metros combined. And we will spend more on infrastructure than the five smaller metros – Nelson Mandela Bay, Buffalo City, Mangaung, Tshwane and Ekurhuleni – combined.

And, importantly, our spending is picking up momentum and increasing year-on-year. This year's R11bn infrastructure budget becomes R14bn next year, and then R18bn the year after that.

Just the water and sanitation portion alone will grow from R2,3bn this year to R7,8bn in 2025/26. That is why we can take on mega-projects right across the metro. That is why Cape Town will be ready for the future.

We are doubling, and then doubling again, our sewer pipe replacements.

We are massively expanding our budgets for pump station upgrades, for sewer jet cleaning, and for bulk sewer upgrades.

We are expanding our MyCiti bus service to link Khayelitsha and Mitchells Plain with Wynberg and Claremont.

We are expanding our Metro Police training college and we have budgeted for 85 new Metro Police officers this year.

We are expanding our city's crime-fighting technology with R860m worth of cameras, drones and gunshot-tracing tech over the next 3 years.

We are expanding our City-run Safe Space transitional shelters.

We are expanding our land release for social housing and our budget for "no-cost" transfers of rental housing units, and what a pleasure it was to visit Leonsdale yesterday where 90 of these homes have been transferred already, with 190 to go.

And, importantly, we are expanding our interventions to end load-shedding in Cape Town to the tune of R2.3bn over the next three years.

We are expanding all of these things because our city is expanding, and at a rapid rate. And if we want that to be our strength rather than a crisis, we need to get ahead and stay ahead of that growth.

This budget will let us do just that.

But, Speaker, I know that South Africans everywhere – including here in Cape Town – are very concerned about the future of our country, and about their own financial situations.

In the two months since the draft budget was presented to this council, our country's situation has deteriorated.

The rand has lost a lot of value, our energy situation has become even more precarious, and our place in the world has come under scrutiny, further threatening our trade with some of our most important global partners.

All of these things have placed a suffocating grip on our economy, which shows no imminent signs of recovery. Food prices continue to climb, fuel prices continue to climb, and South Africans are finding it harder and harder to make ends meet.

Eskom's massive 18 and a half percent increase to the electricity tariff is going to further deplete household budgets that are already stretched to breaking point, and the latest hike to the interest rate will compound the pressure for those paying off home loans and other debt.

That is the situation we face as we head into winter – unsure of Eskom's ability to sustain electricity supply, unsure of what will happen to the price of a basket of basic food items, and unsure of our country's future in the eyes of the world.

Again, South Africans have been told to tighten their belts, but for many there is no more tightening to be done. Poor households across the country are already on the brink and don't want to be told, by a national government living it up on taxpayer-funded perks, to tighten the belt.

They want to hear that there is a plan to ease some of the burden – a plan to expand relief measures and to help put some rands back in their pockets every month.

Speaker, that is one of the goals we set out to achieve with this budget, and I am proud to table a budget that does more for the poor – by every conceivable metric – than any other city in the country.

I know our city's poorest residents will still struggle in these tough times, but I also know that they will get far more protection against cost-of-living pressures through this budget than residents of any other city or town.

Our total social support package has gone up by more than half a billion rand this year to R4,3bn, of which R2,37bn will be for free basic services and R1,96bn will go towards rates rebates.

Cape Town continues to offer the highest allocation of free water at 15kl, the highest allocation of free sanitation at 10.5kl and the most free electricity units of all the metros linking social relief to property value.

A full 40% of households in Cape Town will receive water and sanitation services free of charge – by far the highest in the country.

Speaker, households are also facing Eskom's massive, unjust 18,49% Eskom tariff hike. The City has absorbed as much of this as possible – lowering it to 17,6%, and we are working as hard and as fast as we can to move away from our dependency on Eskom's unreliable, expensive electricity.

There is, however, good electricity news in this budget for lower-income households on the Lifeline tariff. They will receive special protection, paying 50% less for electricity in the 350 to 450 unit monthly usage band. This amounts to R1,84 per unit, instead of R3,71 without City protection.

In addition to this, we've also upped the property value criteria to qualify for the Lifeline tariff, from R400 000 to R500 000, because we know that property values have grown and we still want all those Lifeline customers to qualify.

Another big intervention to ease the burden on struggling household budgets is the 50% increase on the rates-free portion of properties under R5m. That rates-free portion used to be R300 000, but now you'll pay no rates on the first R450 000 of your property value. This has already been unanimously endorsed by Council.

There is also no more stepped rebate – everyone under the R7 500 monthly income threshold will get a 100% rebate for property rates and refuse removal. We're talking about 192 500 households across Cape Town.

And we have raised the qualifying income limit for pensioners to R22 000, enabling many more pensioners to benefit from rates rebates in Cape Town.

So whether you go by property value, or whether you go by monthly income, no metro offers more indigent relief than we do.

I want to encourage Capetonians to find out whether they qualify for indigent benefits, and to then make use of this important financial assistance.

So I now want to speak directly to Capetonians who could get help but may not know how to access all the help we are offering.

If you are:

• A pensioner with a household income of less than R22 000 per month
• Living off social grants
• Have a household income of less than R7500 per month

Then you qualify for indigent relief or pensioners relief which includes totally free rates and steeply discounted service charges.

All you need to do is visit your nearest municipal walk-in centre, or you can contact your ward councillor or subcouncil office, or you can fill in the forms on our website and email them to rates.rebate@capetown.gov.za

If you do go to a walk-in centre, there are a few documents you will need to take along with you. They are:

• Your ID card.
• A bank statement for the last three months
• A bond statement for the past three months if you have one

If you are employed, you'll also need to take along your latest payslip or a letter from your employer stating your income.

Indigent support and rates relief are there to help Capetonians get through the month with some money to spare for necessities. I urge you to find out if these measures apply to you.

I also remind all our residents who have built up debt with the Council that dates back to Covid lockdown or even before Covid, that you may qualify for debt write off under Cape Town's debt assistance programme.

I'm pleased to report that over 63 400 Capetonians have received partial or full debt write-off under this programme so far. That is great news.

But we still have many families who can benefit from this programme, and I encourage them also to make their way to a walk-in centre to discuss it with one of our client care professionals.

Speaker, this is a budget that cares for the vulnerable and protects the poor from the worst blows of our struggling economy. Not all the blows – life will still be hard for many until our economy recovers and more people can find work – but certainly the worst blows.

On top of these measures to shield low-income households in Cape Town from ever-increasing cost of living pressures, Cape Town also continues to offer its ratepayers by far the biggest bang for their rates and tariffs buck of all the metros with the lowest property rates for both residential and commercial properties, based on the cent-in-the-rand rate.

You might wonder how all of this is possible. How can we table the biggest infrastructure spend of all the metros, the biggest indigent relief of all the metros and the lowest property rates of all the metros? The maths shouldn't work.

Yet it does. And it works because our metro works.

Investors are attracted to where they have confidence in the future. In Cape Town they see a safe bet.

They see a City planning far ahead and investing in the critical infrastructure that will make this a viable place to run a business decades into the future.

They see a City working hard to remove bureaucratic obstacles, rather than impose them.

They see a City that cares for all its residents and is building a shared prosperity.

Investors are attracted to this kind of good governance, which leads to increased revenue, which keeps rates in check, and which then allows for higher spending on services and infrastructure.

It's a virtuous cycle that raises the quality of life for all who live here.

That is what this budget represents. It is the result of many years of clean and responsible governance, and I am truly excited about what it will achieve in the coming years for this metro.

I want to thank everyone who worked tirelessly for months to make it happen – our

CFO and his budget team, our excellent policy unit, my Mayoral Committee, the city's Executive Management Team, and every councillor and official in this administration.

You deserve a lot of credit for the critical work you have enabled in the metro through this budget.

And finally, I want to thank our city's ratepayers for their loyal support for our mission of building a City of Hope for all. I assure you, we will always strive to be responsible and accountable with your valuable rates contributions.

Speaker, Cape Town's 2023/24 annual budget is hereby tabled for adoption and implementation.

Thank you.

Published by:
City of Cape Town, Media Office