City of Johannesburg postpones crucial budget meeting

The City of Johannesburg had hoped that on Tuesday 30 June, the MMC for finance, Jolidee Matongo, would present the metro’s budget. However, the city’s mayor, Geoffery Makhubo, requested that the extraordinary council sitting be moved to Thursday, 2 July, a day after the official budget year had already begun.

“As the government of local unity we wish to assure residents of our most genuine commitment to delivering services and extending support to the vulnerable and affected during this difficult period exacerbated by the Covid-19 pandemic,” Makhubo said on Tuesday.

The agenda for the Extraordinary Council Meeting, scheduled for Tuesday, was to consider the 2020/21 Draft Integrated Development Plan, Medium-Term Budget, and Property Rates Policy and Bylaws but was postponed at the request of Makhubo.

The postponement was because political parties in council required more time to consult, “a process largely hindered by the current Covid-19 pandemic”.

“We need a longer consultation process to give us more time so that when we speak on the budget we speak as one voice,” alderman Alco Ngobese, provincial secretary of the Inkatha Freedom Party (IFP), told Daily Maverick. 

“We use Microsoft teams to consult during this time which has been difficult trying to get people under one roof, because people will either have issues with the network or not have enough data, or when the electricity switches off we can’t have the meeting.”

The Democratic Alliance (DA) told Daily Maverick that the party welcomed the postponement as there are items on the “capital budget” with which they are still unhappy.

“The postponement of the council meeting will allow for more engagement with the administration with some elements in the budget that the DA is still not happy with,” said Dalu Cele, the DA caucus spokesperson. 

“One of the issues we have is the capital budget. However, I am not at liberty to disclose which items.”

Daily Maverick asked the Economic Freedom Fighters (EFF) for comment but they declined to offer one. 

The lack of an approved budget will have severe implications for the City of Johannesburg, said Crispian Olver, former government director-general and local government expert.

“The legislation is very clear they have to have an approved budget before the start of the budget year; in fact, they should have considered the budget a month ago,” Olver told Daily Maverick. 

“They will not be compliant; that’s going to trigger a whole bunch of further things… treasury may take other steps, including withholding grants.”

Olver said the council is obligated to have a sitting until a budget is approved but this could cause provincial executives to intervene to ensure that a budget gets adopted.

“That can include dissolving the council and appointing an administrator as they did with Tshwane,” Olver explained.

The Organisation Undoing Tax Abuse (Outa) welcomed the City’s plan on Monday 29 June to drop a new monthly charge on prepaid electricity, but wanted final confirmation from the budget that was meant to happen on Tuesday.

The City had planned to charge domestic users R230 (incl VAT) a month and businesses R460 (incl VAT) on prepaid electricity. Outa project manager Tim Tyrrell said the “general sentiment by Joburg residents is that there should be no new prepaid electricity fixed charges”.

“We now encourage residents to ask their councillors if they have voted or are going to vote for or against the increases in the budget,” Tyrrell said.

“We call on the 270 councillors in the City of Johannesburg to decline these increases as a show of solidarity with the constituencies they serve in this trying time. The City must put its people first. Unnecessary costs in the City must be cut to make up for shortfalls.”

Outa released a statement on 24 June claiming that the proposed draft budget ignored the economic realities of Johannesburg’s residents.

Outa called for a 0% remuneration increase and 0% tariff increase for the new financial year, and for the city to instead reduce its operating costs.

Makhubo said he was confident the budget would be adopted on Thursday.

“We are confident that within the shortest possible time we will pass the budget and begin to respond to the urgent challenges of water and sanitation provision, housing, electrification of settlements, visible policing, crime prevention and waste removal,” Makhubo said. DM