Joburg coalition accepts EFF’s proposed tariffs
• DA-led coalition chooses conceding to lower hikes over being placed under administration
Johannesburg’s governing coalition has conceded to the EFF’s proposed rates and tariffs. Mayor Herman Mashaba says the reduced rates and tariffs will probably result in a smaller surplus and reduced revenue base in the metro’s budget. Johannesburg’s budget has been in limbo since the EFF rejected the city’s proposed rates and tariffs in the 2018-2019 budget last week.
Johannesburg’s governing coalition has conceded to the EFF’s proposed rates and tariffs.
Mayor Herman Mashaba said the reduced rates and tariffs would probably result in a smaller surplus and less revenue in the metro’s budget.
Johannesburg’s budget has been in limbo since the EFF rejected the city’s proposed rates and tariffs in the 20182019 budget last week.
In a special council meeting on Monday, the EFF’s Musa Novela proposed a 7.17% increase for electricity, a slight decrease from the 7.37% originally put forward.
He also proposed that the average tariff increase on water, sewerage and sanitation be reduced by 1% to 13.2%. The city later said the reduced tariff was based on the Rand Water tariff increase of 12.2% and included a 1% retail margin.
Last week, the EFF abstained from the vote, which led to the rates and tariffs not being passed. This resulted in the city failing to pass its R59bn budget. The EFF is the kingmaker in the metro, without which the DAled coalition does not have the majority of votes it needs to pass the budget.
Mashaba confirmed on Monday that the coalition had accepted the EFF’s proposals.
The budget would now have to be reworked as the rates and tariffs were a crucial aspect of funding it.
Mashaba said a special council meeting would take place next Monday, where the amended rates, tariffs and budget would be tabled for consideration by the council.
The council has until the end of June to pass the budget, or risk being placed under administration by the provincial government, run by the ANC.
Mashaba said he would be meeting with his budget steering committee on Monday to work on the numbers.
“I think materially it will help our residents, but for us as the city, fortunately it is still a fundable budget,” he said.
SERVICE DELIVERY
Mashaba said he did not think it would be necessary to make any cuts to costs.
He said he would make sure the decreased rates and tariffs did not affect service delivery, and that the surplus should rather be reduced. The Joburg mayor said, however, the revenue base would shrink, as well as the operational expenditure budget, but that the reduced increase would not affect the city’s programmes.
Novela said the EFF was happy the coalition was considering its proposed amendments. He said the party would reject the budget if their proposed increases were not accepted.
ANC Johannesburg chairman Parks Tau said the projected surplus on the budget before the amendments was R430m, which would be used to fund the capital budget, which he said was already not funded.
He said if there was a reduced surplus, it had to be factored into the capital budget.