SPEECH BY EXECUTIVE MAYOR ALD PATRICIA DE LILLE: ON THE ADOPTION OF THE MUNICIPAL BUDGET 2011/12, June 8 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 bulk-infrastructure. 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 cross-subsidisation 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 community-based 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.
Issued by the Communication Department, City of Cape Town, June 8 2011
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