Joburg’s Morero lays out R80bn budget

The tabling of the budget has been delayed by the political instability in the metro which has changed mayors thrice in the first half of this year.

The city's operational expenditure sits at R73.3 billion, while capital expenditure stands at R7.6 billion for the 2023/24 financial year, with a three-year capital budget of R24.4 billion.

Referencing a popular Tv show ‘I blew It’, which profiles individuals who rapidly and recklessly spend millions, Morero painted a dim picture of the city’s finances, blaming it on poor revenue collection by the previous administration.

According to him, revenue collection dropped from R6.6 billion in June 2021 to R3.8 billion in June 2022.

“We need a minimum of R4,3 billion per month to fund the city’s operations and deliver services so that we can survive as the people of Johannesburg. Unfortunately, there is no R4,3 billion to survive,” the MMC told councillors.

He revealed efforts to cushion property owners against the pressures of interest rate hikes imposed by the South African Reserve Bank in recent months.

The proposed increase in property rates was slashed from just over 5% to 2%.

“In the new financial year of 2023/2024, the property rates will increase by 2%. We have also made some changes to rebates and relief measures offered to residents, notably the introduction of a sliding scale on pensioner rebates.”

Water and electricity tariff hikes will be accompanied by an aggressive campaign for revenue collection and efforts to curb non-technical losses.

Morero said losses on electricity and water peaked in June 2022 at 30 and 32% respectively, an increase from 29 to 25% losses respectively in June 2021.

Water - applicable increase is 14.97% based on the energy regulator’s determination for local government.            

Electricity - increase applicable is 9.3% based anticipated bulk water charge from Rand Water

Sanitation - increase is 9.3%

Refuse – increase is 7% which is informed by a cost recovery model for Pikitup

The lion’s share of the city’s budget goes towards the cluster on sustainable services, which includes the Environment and Infrastructure Department, Housing, City Power, Johannesburg Water, Pikitup, and the Johannesburg Social and Housing Company.

“A capital budget of R14.9 billion across the medium-term and an operational expenditure budget of R45 billion in the 2023/2024 financial year, has been allocated to the Sustainable Services Cluster," Morero said.

The Environment and Infrastructure Services Department has been allocated an operational expenditure budget of R133.7 million, Pikitup gets an operating allocation of R3.9 billion while the Human Settlements Department has been allocated an operational expenditure budget of R1.2 billion.

Councillors are expected to vote to adopt the proposed budget after the debate on Wednesday or face the city being placed under administration.

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