FOR IMMEDIATE RELEASE
31 March 2016
 
CORRECTION OF STATEMENT COUNCIL AGENDA ITEM: ETHEKWINI MUNICIPALITY’S R41.6BN 2016/17 DRAFT BUDGET TABLED

EThekwini Municipality would like to correct the statement regarding the Municipality’s 2016/17 draft budget issued. Below is the corrected statement. We apologise for any inconvenience caused.

EThekwini Municipality is to allocate R14.8bn of its medium term capital budget to eradicating infrastructure and household service needs and backlogs in order to advance economic growth. Structural poverty remains a challenge, with a large proportion of the City's population still living in material income deprivation and under squalid conditions hence R 3.4bn of the R14.8bn is directed to new housing developments and interim servicing of informal settlements.

The City’s consolidated R41.6bn draft budget for the 2016/17 financial year tabled at full council earlier today by his Worship, Mayor, Cllr James Nxumalo is clearly pro-poor and focused on alleviating poverty and social imbalances through job creation, youth development and advancing the economy by creating an enabling platform for business to flourish.

“Provisions in this medium term budget continue to support government’s commitment to broadening service delivery, attracting investors and expanding investment in infrastructure, while taking into account the constrained fiscal environment,” said Nxumalo. 

“The City's Social Package affirms our commitment to pushing back the frontiers of poverty by providing services to residents who cannot afford to pay. The cost of this social package is partially funded from the equitable share of R 2.3bn provided by National Government. This package will assist poor households with access to water, electricity and sanitation.”

The 2016/17 draft budget is made up of a capital budget of R6.7bn and an operational budget of R34.9bn.

One of the highlights of the capital budget is the almost 71% attributed towards utility services, which provides basic services such as water and sanitation, electricity and refuse removal together with housing provision over the medium term expenditure framework.
The growth of the operational budget is mainly due to the bulk purchases, salary allowances and repairs and maintenance.

Nxumalo said that having achieved a clean audit for the 2014/15 financial year, for good governance and service delivery, along with the City’s two municipal entities and over 75 % of residents having access to basic services the new draft budget is reflective of the achievements over the last 16 years of a democratic local government. This Budget seeks to continue to respond to the service delivery challenges, economic and infrastructure development and faster, more inclusive growth and job creation in line with the strategic vision of the City as outlined in our Integrated Development Plan (IDP).

“Despite the tough economic times, the present global downturn and the introduction of fiscal austerity measures the City is determined enough to manage and overcome these economic challenges by strengthening social solidarity through public representatives, civil servants, business people, youth, workers and residents,” Nxumalo added,
 
Notwithstanding increasingly challenging economic constraints, the budget continues to sustain service delivery by reprioritising expenditure to ensure key objectives are achieved.

Taking heed of Treasury and the belt tightening measures made in the National Budget speech we have proposed an across the board cut be made to Vacancies, Overtime, Security, Vehicle costs, Consultants, eventing, seminars and conferences to curb expenditure.”

The Municipality is passionate about youth development, skills training and empowerment and has budgeted more than R80m for youth development initiatives during the 2016/17 financial year.

To date, the Municipality has created the highest number of work opportunities through the inception of the Expanded Public Works Programme (EPWP), a National Government initiative with the figure totalling 134 883, which is higher than any other city in South Africa.
A further R49.5m of the budget is allocated to boost the EPWP that will see 29 000 more people benefit in the 2016/17 financial year.

The artisan development programme intended to improve municipal maintenance will create 10 000 work opportunities over the next three years. The project will be funded through savings from the maintenance budget.

The Zibambele Poverty Alleviation programme is another initiative which has contributed to economic transformation through a comprehensive skills advancement programme has created about 6200 jobs. Dube TradePort, Africa’s first purpose-built Aerotropolis, is an initiative designed to drive investment, stimulate growth, create jobs and develop skills. DubeTrade Port has already attracted more than R900m in private sector investment over the past five years, creating some 15 000 jobs.

In addition to our mandated capital spend on service delivery the Municipality’s focus is in developing a sustainable city for our communities and boosting the rates and services income whilst also creating employment. To this end we have in place 65 flagship investment projects which is likely to generate about 680 000 permanent new jobs in our region.

In addition the recently adopted Economic Development Incentive policy seeks to attract development to the city by offering incentives with a long term view in growing city revenue. Hence the key focus is on catalyst projects that will see City investing about R2.5bn over the next three years in order to stimulate economic growth and job opportunities.

Every effort has been taken to ensure that tariff increases in rates and municipal service charges are in line with or below inflation and that the affordability of the total municipal account for all residents should be our priority. 

Tariffs have been drafted taking into account the current economic market, increase in bulk purchases cross subsidisation, slow growth percentages and the decrease in consumption of water and electricity.

“Increases in respect to bulk purchases of water and electricity is beyond the control of the Municipality attributes to 9.4% Eskom increase approved by Nersa and 11.5% increase by Umgeni water board coupled by the decrease in consumption of both these utilities due to the current drought conditions and the implementation of energy efficient initiatives. However to maintain sustainable service delivery, the City has to ensure sustainable revenue streams from revenue generating services. 

Proposed tariff increases are as follows:
  • Rates: 6.9%
  • Water:
  • Domestic: 12.5%
  • Business: 15.9%
  • Electricity: 7.64%
  • Sanitation: 9.9%
  • Refuse Removal: 7.9%

Nxumalo tabled the draft budget for comment. The Municipal’s leadership and administrative arm will engage in extensive public participation and consultation at various venues throughout the City during April. The draft budget can be viewed at City Hall or on the Municipal website, www.durban.gov.za. Once the deadline for comments has been met and amendments are considered the new rates and tariffs will be implemented at the start of the new financial year, being 1 July.

 
ENDS
 
Issued by eThekwini Municipality’s spokesman, Thulani Mbatha.
 
For more information members of the media can contact Gugu Sisilana on 031 311 4855 or email: gugu.mbonambi@durban.gov.za or Princess Nkabane on 031 311 4818 or princess.nkabane@durban.gov.za