SPEECH BY EXECUTIVE MAYOR ALD PATRICIA DE LILLE: ON THE
ADOPTION OF THE MUNICIPAL BUDGET 2011/12
08 JUNE 2011
Mr Speaker, councillors, City Manager, officials, ladies and gentlemen.
It is a great honour to present the budget to the council today in my first
address since this council was sworn in.
This is a great moment for our city as this budget is the bridge between
the priorities of two administrations.
The previous administration was tasked with addressing long-standing
problems and catching up with the backlog of much needed bulkinfrastructure. We are still continuing with that task and it will inform our
planning for the city so that we can continue to deliver for all.
The success of that infrastructure roll-out thus far will allow this
administration to focus on creating the economic environment in which
investment thrives and jobs can be created. When we create those
conditions, we would have served all the people of this city by giving
them basic services and making their metro a hub of opportunity.
All of us here were elected with a duty to serve the people, with our
primary duty centred on local government’s mandate to deliver services
to all the people. In order to fulfil that mandate, the City requires the
financial means to ensure that the roll-out of basic services continues
uninterrupted.
That is the task we are faced with here today and we must not be
distracted from the responsibility that this vote represents for all of us.
This budget has been a year in the making. It has included engagement
with all relevant stakeholders and debate from draft presentations in this
council chamber. The principle of the continuity of government has within
it the assumption that the work of government does not begin from first
principles after each election.
I firmly believe that every party in this chamber has had sufficient time to
engage with the contents of this budget. It is my sincere wish that
returning councillors have familiarised their new colleagues with the
details of the budget in their respective caucuses. We have followed due
process in this budget presentation. All councillors are no doubt aware
that, by law, we have to conclude this process by the 30th of June.
I ask that we conclude the budget process with a vote today so that we
can continue with our work. Any distraction or attempted block of that
process compromises delivery. And by compromising delivery, we
compromise our citizens.
I ask councillors to bear these facts in mind as we prepare to vote.
Mr. Speaker, this budget has been drawn up with two key considerations
in mind. It is a budget that is still mindful of the fact that we are only just
tentatively emerging from a multi-year economic downturn. As such, it
has prioritised high priority programmes, to drive efficiencies and deliver
on our mandate. That mandate was informed by the previous
administration’s IDP.
In so doing, this budget continues infrastructure outlay to ensure that
every citizen of this city has services provided to them, most especially
the poor, and also to provide the enabling environment necessary for
economic development.
This financial year, our total operating expenditure will increase from R19,
476 billion in 2010/11 to R21, 913 billion. This represents a 12,5%
growth in spending, a consequence of rising bulk purchase costs, new
transport allocations with the IRT and rising employee costs negotiated at
the bargaining council.
This is measured against a rise in total operating revenue from R19, 442
billion in 2010/11 to R21, 913 billion this year.
Our capital budget also increases mainly due to increases in state grants
from R3,995 billion in 2010/11 to R5, 09 billion this year.
National government continues to recognise Cape Town’s ability to spend
the money granted to it from the Treasury on the key projects that
improve the lives of our citizens.
Mr. Speaker, there is a tendency to view the strategic objectives of
government as isolated mandates. Some people look at delivery to the
poor only. Others consider what the government is doing to fix
infrastructure, the basic physical units of delivery. They want to be able to
count the number of water and electricity connections. Still others want to
know what the government is doing to encourage investment. Each
person seems to have their own priority that they choose to focus on.
What they fail to understand is that you cannot view these things in
isolation. Together, they are a complex set of relationships that are
dependent on each other for their own success. You cannot deliver to the
poor if you do not have physical infrastructure. You cannot create the
economic environment for investment if there is no infrastructure. And
you cannot talk of a city that is creating opportunities for job creation and
dignity if it does not look after the poor.
This budget today sees these relationships and addresses them with the
aim of consolidating the successes of the last administration. The new
administration can begin to implement strategic objective of fostering the
conditions in which jobs can be created.
In this regard, we will deliver to all citizens with rates increases adjusted
for prevailing economic conditions. As such, tariff increases above the CPI
must be viewed against the rising costs, especially the price of bulk
electricity from Eskom, staff remuneration from the bargaining council
agreement and the bulk purchases of water from the Department of
Water Affairs.
But these increases are also to satisfy the necessity for crosssubsidisation of the poor. The free basic services we provide to the poor
are the most comprehensive of any metro in the country. These increases
will be carried out under this City’s policy of distinguishing between those
who cannot pay for rates and those who will not pay.
There will be a rates tariff increase of 5,9% that will lead to a total
revenue increase of 7,3%. Our rates policy ensures that we look after the
most vulnerable members of our city.
This will allow for the reclassification of old-age homes as residential, not
commercial, allowing them to pay half the rates.
Furthermore, this budget will see the rates rebate qualification for senior
citizens and the disabled moving to those people who earn below R10 000
a month.
This increase will also allow for the continuation of our indigent policy and
indeed, for its expansion.
Those households with an income of less than R3000 a month or a
property valuation of less than R200 000 will continue to qualify for a full
rates rebate.
Furthermore, this budget proposes a new indigent category where
qualifying ratepayers with monthly incomes between R3000 and R4000
will get a 50% rates rebate.
The tariff increase for water and sanitation will be 8,28%, which will lead
to a total revenue increase of 10,1%.
This will allow us to continue providing the free daily allocation of water of
350 litres to people who cannot afford it.
In total, the City will spend R1,26 billion on free services to the poor in
the 2011/12 financial year.
In solid waste, there will be a tariff increase of 5,5%, with the indigent
rebate sliding scale for residential properties ranked below R400 000
remaining in place.
Even though bulk supply costs from Eskom increased by 26,71%, the
average City tariff increase is only 19,94%, which leads to a total
revenue increase of 22,4%. We will ensure that the free 50 Kilowatt hours
per month free for all people within the City’s area of supply receiving less
than 450 Kilowatt hours or less per month, will remain.
Mr. Speaker, these increases will allow us to adequately finance the
departments that deliver services to the people, especially free basic
services to the poor and vulnerable people of our city.
Community Services will receive approximately R1,2 billion, an increase of
8,2%. This will enable us to provide the amenities that make our city
more inclusive.
Corporate Services will receive approximately R1,6 billion, an increase of
8,2%. This money will be used to ensure that the city is well-staffed with
professional and caring public officials.
Economic and Social Development will receive approximately R300
million, an increase of 9,8%. This will allow us to focus on the new
separate Mayco portfolio of social development. This portfolio will ensure
that the city has caring social services.
Finance will receive approximately R1, 5 billion, an increase of 4,1%. This
money will be spent ensuring that we have the means to finance the city’s
development.
Health will receive approximately R700 million, an increase of 12,4%. This
allocation will mean that we can continue to provide our citizens with
primary health care.
Housing will receive approximately R700 million, an increase of 9,1%.
Housing will be able to continue with their excellent track record of
delivery, which has seen housing delivery increase four-fold under the
previous administration.
Safety and Security will receive approximately R1,2 billion, an increase of
6,1%. This money will ensure that our metro police and our communitybased initiatives will help keep us safe.
Strategy and Planning will receive approximately R389 million, an
increase of 4,3%. This department will help guide the city’s new economic
direction and improve planning regulations.
Transport and Roads will receive approximately R1,8 billion, an increase
of 23,1%. This will be mostly allocated to continuing the roll-out of the
IRT which is becoming a world-class public transportation system for our
people.
And Utility Services will receive approximately R11, 3 billion, an increase
of 16,7%. This money will ensure the continued roll-out of basic services
to everyone, especially the poor.
All of these allocations will help the City drive economic development
through infrastructure-led growth while maintaining our core social
functions of supporting the poor and the vulnerable in the city.
These allocations will allow for the continuing transformation of our
communities through major socio-economic projects.
For example, in Utilities, R115 million has been assigned for new waste
water treatment works in Bellville and Khayelitsha.
R1,2 billion has been assigned to transport to continue the roll-out of the
IRT that is becoming the symbol of a united city.
And R292 million has been allocated to housing for the upgrade of City
rental units.
These projects, and others, are helping to build Cape Town so that we can
realise the full potential of both our people and our economic capabilities.
Mr. Speaker, a reassessment of the rates income indicates that there is
an additional R25 million.
I propose that this money be divided between 4 projects that I am deeply
passionate about.
I propose R2 million be given to help the City’s homeless. Only by helping
the most vulnerable can we speak of a City that is truly inclusive and
cares for all.
I propose R5 million be given to help speed up the roll-out of the Violence
Prevention through Urban Upgrading (VPUU) in Manenberg. The VPUU
was one of the great success stories of the past administration and has
helped the people of Khayelitsha by making communities there safer. The
roll-out of this programme is underway in Manenberg and these funds will
assist with its implementation.
I propose R8 million be given to assist with the establishment of
apprenticeships in the utilities departments. The electricity department
has had great successes in training young people to become qualified
technicians, many of whom have now been employed by the City or the
private sector.
The programme was a success in electricity because of skilled and
qualified trainers. To help train new technicians for the city and also help
with the demands of the private sector, this allocation will mean that
utilities can begin training apprentices and sending them to accredited
technical institutions.
Last, I pledged to help the city’s backyarders with services. In order to do
that, the City needs an idea of the extent of services needed in
communities. Those measurements have already taken place in Langa
and Hanover Park in pilot projects under the previous administration.
I propose R10 million be given for the further roll-out of these engineering
surveys to even more backyarder communities across the metro so that
we can begin planning and budgeting for their needs. This is an essential
step to providing formal basic services to these often forgotten
communities.
This budget was informed by the last IDP, which focused on
infrastructure-led growth. It represents the consolidation of those goals
with the realisation that the need for infrastructure continues. We are
now starting the process to develop the IDP that will inform the budget
for the next 5 years in August. We are moving towards our goal of leading
economic development through being able to direct new infrastructure
patterns where new development can take place. All the while, this
budget ensures that we serve all of our residents in our core mandate of
service delivery.
It is thus the bridge from the past objective of addressing infrastructure
backlogs towards our strategy of creating the economic environment for
investment in which jobs can be created. We will shortly be undertaking
the new IDP process and engage with all stakeholders, including
communities, civil society and the private sector. That engagement will
seek input on how we can move forward to tackle poverty. We must do all
that we can as a City to encourage the growth of employment
opportunities.
That process will take time and hard work. But that work will be done to
ensure that Cape Town remains the best metro in the country. The first
step, however, is to ensure that we continue to roll-out services and serve
the people of this city.
Mr Speaker, I hereby table the budget as amended.