Mayor Hill-Lewis tables Cape Town’s ‘Building Hope’ Budget for 2023/24

29 March 2023

Mayor Hill-Lewis said while last year’s budget laid the foundation for Cape Town’s vision of ‘a City of hope for all’, this second budget of his administration was about ‘building hope’, with major construction and infrastructure investments to position Cape Town for economic growth.

‘The balancing act in a big city’s budget between the needs of vulnerable residents, the scale and scope of future planning, and the economic pressures on ratepayers is one of the toughest challenges to solve.

Today we are considerably widening the safety net of care and relief for vulnerable Capetonians. And we are making possible the most ambitious future planning and investment ever undertaken by this City. We have done so with the utmost care and respect for the City’s ratepayers.

‘It is both a progressive budget in its pro-poor focus, and a proactive budget that looks and plans far ahead. That’s why we call this the “Building Hope” budget – real hope for the people of Cape Town, and a beacon of hope for the rest of South Africa.’ said Mayor Hill-Lewis in his address to City Council.

Expanding the safety net of rates rebates and indigent relief

The City’s total social support package is up more than half a billion rand in 2023/24, from R3,75bn to R4,3bn, including R1,96bn in rates rebates and R2,37bn for free basic services.

The budget proposes a 50% rates relief increase for all residential properties of R5 million and under, with the first R450 000 of property value now rates-free.

More pensioners and social grant recipients will also benefit from rates rebates, by raising the upper qualifying limit from R17 500 to R22 000 total monthly household income.

Over 192 000 properties valued at R450 000 or below, or with household income below R7 500, will receive these monthly benefits:

100% rebate for property rates and refuse removal

15kl free water and 10,5kl free sanitation

Up to 60 free units of electricity

Electricity prices and support for the vulnerable

Mayor Hill-Lewis said the City has been able to reduce Eskom’s 18,49% increase to 17,6%, and offer significantly more protection for lower income customers on the subsidised Lifeline tariff, while still funding plans to end sole reliance on expensive Eskom power as soon as possible.

‘What hurts me, and I know it hurts every Capetonian, is the massive 18,49% Eskom tariff hike to municipalities. We fought against Eskom’s increase at every step of the way because it cannot be the job of the City, or its residents, to keep on subsidising Eskom’s increases. I know how much people are struggling to make ends meet right now, and that Eskom’s spiraling electricity prices wreak havoc in household budgets.

We have made changes to the tariff structure for residents who qualify for the subsidised Lifeline electricity tariff. Currently, customers consuming more than 350 units would pay R3,71. Because of the Lifeline shift we are making today, those customers will now pay R1,84. We have also raised the property value criteria for Lifeline customers to R500 000 – up from R400 000 – to compensate for residents’ property value growth,’ said the Mayor.

Massive infrastructure investment increases

The City’s record R10,9bn infrastructure budget is 40% bigger than this year, with spending set to increase to a record smashing R18bn in the third year of the Medium Term Revenue Expenditure Framework (MTREF).

Major sanitation network investments include a 100% increase in sewer pipe replacement budgets, 330% increase in sewer pump station upgrades over the next three years, and a R8,6 billion for wastewater treatment works upgrades.

‘In the last year alone we have begun to see a real, steady decline in the number of sewer spills in communities thanks to the investments we’ve begun to make’ said Mayor Hill-Lewis.

The Mayor said Cape Town’s waterways are ‘incredibly important for the health of surrounding communities, for their value as recreation facilities and for the environmental preservation of these areas’, with R265 million budgeted for the dredging of the Milnerton Lagoon and Zeekoevlei to remove decades long build-up of pollution.

The City is further investing R2,2bn in its New Water Plan for more water security in Cape Town, with major groundwater projects underway to tap into aquifers.

Ending load-shedding

The R2,3bn end load-shedding plan includes R220m to buy power on the open market, R288m for the Power Heroes voluntary energy savings incentive scheme, R1bn to operate Steenbras hydro-electric plant, R53m in ‘cash for power’ payments for solar power from residents and business, R640m on City-owned solar plants, and R50m in battery storage technology.

Mayor Hill-Lewis said Cape Town was aiming to protect residents from the first four stages of Eskom’s load-shedding within three years.

‘We are confident that Cape Town will be the first metro to break free from the suffocating hold that Eskom has placed on our country, and in doing so we will show that there is a bright electric light at the end of this Eskom tunnel,’ said the Mayor.

Making Cape Town safer

The City is proposing its biggest ever Safety budget of R5,8bn for 2023/24, including funds for 85 new Metro Police officers this year alone, and R166 million to expand its Metro Police training college.

The budget includes a major R860m investment in safety technology over three years to make Cape Town Safer. This includes CCTV, drones, aerial surveillance, licence-plate recognition, dashcams and bodycams for officers.

Doing the basics better

The Building Hope Budget 2023/24 makes major investments across the board to do the basics better on service delivery, including:

R3,2bn in informal settlement upgrades and basic services

a R100 million boost this year for extra road maintenance

R659 million for new refuse removal trucks and equipment

R230m over the next three years to operate and expand Safe Space transitional shelters to help more homeless people off the streets

improve ease of doing business and customer experiences, the City is investing R75m to upgrade its online services offering, R25m for vehicle licensing improvements, and R125m on digital platforms to report service delivery issues.

More affordable housing

Mayor Hill-Lewis further told Council that ‘the future of affordable housing provision in South Africa is being pioneered in Cape Town’.

‘One of the biggest challenges in such an expanding and densifying metropolitan area is the availability of affordable, dignified housing. We have allocated R37,8 million for our “no-cost transfers” of 2,500 rental units per year over the next three years. Over this period we want 7500 families to be homeowners for the first time of the homes they’ve lived in sometimes for decades, at no cost to them.

We’ve also budgeted in full for our key priority programme of land release for thousands of new social housing units in well located parts of the city, for development by our Social Housing Institution partners and the private sector.

Crucially, we budget today for the first time for the roll out of our planning support officers in townships. Their jobs will be to help micro developers of small scale rental units to build their units in a way that is safe and compliant. We’re now developing off-the-shelf, pre-approved building plans for these new support staff to roll out,’ said the Mayor.

Issued by Media Office, City of Cape Town, 29 March 2023