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City’s 2016/17 draft budget to deliver continued progress and opportunities<p>​<strong>Note to editors: the following speech on the draft budget was delivered by the City’s Executive Mayor, Patricia de Lille, at the full Council sitting this morning. </strong></p><p>Good morning, goeie dag, molweni, as-salaam alaikum, shalom.</p><p>Mr Speaker,</p><p>These are difficult times for our country.</p><p>We face the possibility of a credit rating downgrade due to a lack of confidence in our National Government.</p><p>This has only been heightened by recent revelations about the behaviour of the president and his relationship with vested business interests, not least members of the Gupta family.</p><p>I hope that when the ratings agencies are taken to sites of government decision-making, they swing by the Gupta compound in Saxonwold to understand where the ANC is getting its instructions from.</p><p>This is in addition to the fact that the economic climate in our country is under pressure due to low growth rates. </p><p>We are currently sitting at a growth rate of around 1% per annum while the Bureau of Economic Research (BER) projects an average of 1,6% average growth over the next three years. </p><p>Needless to say, such figures are well below the necessary 8% of annual growth needed to generate employment and well below the official targets of the National Development Plan (NDP).</p><p>The BER has forecast the Consumer Price Index (CPI) to be above the 6% upper inflation target range for the next two years.</p><p>Our currency has declined against the US Dollar over the past three years for a range of factors, not least poor business confidence in South Africa’s National Government.</p><p>This economic picture has helped inform fiscal and national policies with a direct bearing on the way municipalities are funded in terms of grants received from the National Fiscus.</p><p>Indeed, there have been a number of provisions from the National Treasury for municipalities to consider in drawing up their budgets.</p><p>For instance, they ask that municipalities spend at least 40% on the renewal of infrastructure in their capital budgets – a target we exceed with our 48% spend on renewal.</p><p>They ask that we implement austerity measures – cuts in catering, entertainment, public functions, and travel – which we already effected years ago and matched with measures targeting consultants and vacancies.</p><p>And they asked us to try and fund our requirements while bearing the pressure on our residents in mind, which we have done by the most generous allocation to the poor in the country, an allocation which the National Treasury in fact thinks is too much but which we understand as part of our social obligation.</p><p>These constraints and contextual factors set the stage for our budget process.</p><p>We have always been leaders in ensuring that we build in a measure of strategy alignment into our budget, with strong measures in place to ensure the funding of the programmes in our Integrated Development Plan (IDP) and strong prescriptions in terms of our taxation targets and ceilings.</p><p>And for the past two years, our investment to change the methodology of planning by building an effective project portfolio management (PPM) system has informed projects flowing through to the budget.</p><p>This year we took our measures of strategy alignment even further by building in screening criteria for new projects finding their way to budget submissions.</p><p>We considered the broader alignment of our IDP and our Social Development and Economic Growth Strategies.</p><p>We built in a measure of spatial consolidation through our measures to encourage Transit-Oriented Development (TOD) and Integrated Human Settlements as expressed in our Built Environment Performance Plan (BEPP).</p><p>This was complemented by a layer considering the provision of basic service infrastructure and integrated investment programme with a consideration of how budget proposals could enable economic growth and contribute to identified catalytic projects.</p><p>These submissions led to the careful consideration of departmental inputs against a broader strategy framework, providing criteria to inform decision-making.</p><p>Our proposed rates and tariff structure is as follows:</p><p>Rates: an average of 6% – down from 10% last year<br>Refuse: 7,92% – down from 8,33% last year<br>Sanitation: 9,75% – down from 11% last year<br>Water: 9,75% – down from 11% last year<br>Electricity: an average of 7,78%, but only 6,6% for domestic supply – down from 10,82% last year<br>Disposal: 12,08%.</p><p>At the level of new additions to our projects, our new budget also has additional provisions for:<br>the Road Congestion Relief Programme<br>park facility upgrades<br>cemetery development<br>the development of the Hanover Park Aqua Centre<br>hardening of facilities to reduce security costs<br>investment in our CCTV infrastructure network<br>additional firearms for safety and security services<br>investments in Project EPIC<br>acquisition of new fire engines<br>the upgrade of the Athlone Stadium and City Hall<br>the upgrade of the Matthew Goniwe Clinic Extension<br>the upgrade of the Gugulethu Clinic<br>roll-out of substance abuse clinics<br>a restoration centre for street people<br>new municipal courts, including Wynberg and Mitchells Plain</p><p>In terms of other strategic initiatives, we have proposed a R229,2 million investment in the Expanded Public Works Programme (EPWP) to provide job opportunities despite only receiving just over R30 million from the National Government for this.</p><p>Indigent relief for the poorest in our city of R1,1 billion.</p><p>And rates rebates of R1,4 billion.</p><p>This means a provision of R2,5 billion for the Social Package, which will assist in relieving some of the financial burden experienced by especially poor households as follows:<br>6 kl of water per month per household free of charge<br>4,2 kl sanitation per month per household free of charge<br>4,5 kl of water and 3,15 kl for sewerage charges on all properties valued at R300 000 or less<br>60 kWh electricity free of charge per month per household for customers using less than 250 kWh per month<br>25 kWh electricity free of charge per month per household for customers using more than 250 kWh but less than 450 kWh per month<br>Waste removal – consumers whose properties are valued between R0 and R400 000 receive rebates between 0% and 100%<br>Rates rebates on various properties in terms of ownership and usage amounting to R1,4 billion<br>The qualification for the senior citizen and disabled persons rates rebate maximum monthly household income is increased from the current R12 000 to R15 000<br>The indigent rates rebate for people younger than 60 years, the maximum monthly household income is increased from the current R5 000 to R6 000<br>Any household with a gross monthly income of R4 000 or less will receive a 100% rates rebate, an increase from R3 500 per month threshold</p><p>These measures in particular show that we continue to honour our commitment to cross-subsidising the poor in the city.</p><p>In all, our total budget proposal is just over R40 billion, with just over R6 billion proposed in our capital budget and just over R34 billion proposed in operating budget.</p><p>Per directorate, the following allocations are proposed:<br>City Health: just over R1 billion in opex and just over R37 million in capex<br>City Manager: over R220 million in opex and almost R38 million in capex<br>Community Services: almost R1,8 billion in opex and over R180 million in capex<br>Corporate Services and Compliance: over R2,5 billion in opex and just under R400 million in capex<br>Energy, Environmental and Spatial Planning: over R580 million in opex and over R60 million in capex<br>Finance: over R2,2 billion in opex and over R136 million in capex<br>Human Settlements: just under R1,7 billion in opex and over R480 million in capex<br>Safety and Security: over R2,7 billion in opex and over R111 million in capex<br>Social Development and Early Childhood Development: R290 million in opex and over R17 million in capex<br>Tourism, Events and Economic Development: over R568 million in opex and over R42 million in capex<br>Transport for Cape Town: over R2,9 billion in opex and under R1,4 billion in capex<br>Utility Services: over R16,6 billion in opex and over R3,2 billion in capex</p><p>Mr Speaker, a good reflection of this government’s spending commitments is a historic consideration of our budget allocations reflecting our five pillars.</p><p>Since 2013, and including the coming financial year’s proposals, total budget allocations in opex for the five pillars have been as follows:<br>caring city: over R9,4 billion<br>inclusive city: over R6 billion<br>opportunity city: over R49,6 billion<br>safe city: over R6,9 billion<br>well-run city: over R13,9 billion</p><p>Since 2013, and including the coming financial year’s proposals, total budget allocations in capex for the five pillars have been as follows:<br>caring city: over R3 billion<br>inclusive city: over R9 billion<br>opportunity city: over R16,6 billion<br>safe city: over R360 million<br>well-run city: just under R1 billion</p><p>And in order to demonstrate our future commitment, considering our exercise in strategic alignment, especially the five pillars which this government uses as a framework, the projections for capex per each pillar over the next three years of the MTREF cycle are as follows:<br>caring city: approximately R1,9 billion<br>inclusive city: just over R900 million<br>opportunity city: just over R14 billion<br>safe city: just over R210 million<br>well-run city: just under R900 million</p><p>And for the same in opex proposals for the three-year period:<br>caring city: over R13 billion<br>inclusive city: over R7,6 billion<br>opportunity city: over R67 billion<br>safe city: over R9,2 billion<br>well-run city: over R16,6 billion</p><p>In addition to future allocations, one must also consider the record of historic allocations at the level of transformative projects.</p><p>In that regard, as a demonstration of our continuing budget allocations for priority projects that include all residents, especially the poor, it is useful to consider a few year-on-year budget allocations for larger projects.</p><p>In that regard:<br>Electrification, including backyarders: R105 million this year following the R70,8 million allocation last year<br>Oakdale Switching Station upgrade: R49,2 million after an allocation of R71,6 million last year<br>Street lighting, with an emphasis on poorer areas: R65,8 million this year in addition to R30,8 million last year<br>Zandvliet Wastewater Treatment Works extension: R198,8 million this year after the R135,9 million allocation last year<br>Completion of Cape Flats 3 Bulk Sewer: R112,9 million after the R84,5 million allocation last year<br>Rehabilitation and upgrading of roads: R108 million after an allocation of approximately R46 million last year<br>Traffic congestion alleviation: R118 million after approximately R97 million last year<br>Backyard dwellers and informal settlements upgrades: R134 million after an allocation of R79,6 million last year<br>Broadband: R222 million after an allocation of approximately R191 million last year<br>And this year an allocation of R508 million to the continued roll-out of the IRT</p><p>Mr Speaker, over the next few weeks, we will be engaging with our residents on this draft budget.</p><p>It is imperative that we have as much interface with the people of our communities as possible.</p><p>Our constitutional imperative of public participation enjoins us to have meaningful engagement so that our delivery efforts can be shaped by the needs and priorities of the people of this city.</p><p>As such, over the next few weeks, there will be a number of meetings held through the subcouncils for public participation around the budget.</p><p>The City is communicating via traditional and social media to encourage participation.</p><p>I would like to request every councillor and subcouncil to have meaningful discussions with the residents in their area, including ward committees and community organisations, to have a constructive dialogue in shaping the final budget that is proposed.</p><p>In conclusion, our proposed budget is a representation of our commitment to continue funding the work of making this great city even greater.</p><p>Budgets cannot be developed by a government alone.</p><p>They should be the product of collaboration between a government and the people it represents.</p><p>It is this collaboration that gives meaning to the endeavour of making progress possible together. </p><p>I hereby table the budget for public participation.</p><p>Let us continue to make progress possible, together. Laat ons vooruitgang moointlik maak, tesame. Senza inkqubela yenzeke, Sisonke. </p><p>Thank you, baie dankie, enkosi. </p><p><br><strong>End</strong></p>2016-03-30T22:00:00ZGP0|#904f8ac3-ad18-4896-a9a8-86feb1d4a1b7;L0|#0904f8ac3-ad18-4896-a9a8-86feb1d4a1b7|Statements;GTSet|#62efe227-07aa-45e7-944c-ceebacca891dGP0|#fdf18b70-b923-45d6-a9d9-e286ab09e287;L0|#0fdf18b70-b923-45d6-a9d9-e286ab09e287|IDP – Integrated Development Planning;GTSet|#2e3de6c1-9951-4747-8f53-470629a399bb;GP0|#4f7896e6-1115-412b-9364-a30f89da1b3a;L0|#04f7896e6-1115-412b-9364-a30f89da1b3a|sub councils;GP0|#5097d747-267b-4abd-a934-d5a444aa25b9;L0|#05097d747-267b-4abd-a934-d5a444aa25b9|well run government;GPP|#fe1372cc-3168-4376-b201-0a8a04d6081e1

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