Joburg running out of time to avert takeover
DA’s failure to pass budget may lead to administration Whole budget has to be reassessed
The City of Johannesburg, SA’s economic powerhouse, is in a race against time to avoid a takeover by the provincial government after the rejection of the DA’s proposed tariff increases left it unable to pass its R59bn budget last week.
The failure of mayor Herman Mashaba’s tariff plan after the metro’s kingmaker, the EFF, abstained on the vote means the whole budget has to be reconsidered, according to a legal opinion sought by the city.
The city has to pass the budget before the end of the municipal financial year in June or face being placed under administration by the ANC-controlled provincial government.
A special council meeting has been called for Monday in which all of the budget-related items will have to be reconsidered and voted on again.
A crucial political challenge for the DA-led coalition in passing the budget is that its most important voting partner, the EFF, is under no official obligation to support its agenda items.
The rates and tariff increases were rejected by 113 votes to 105 votes last week, after the EFF’s abstentions tipped the scales in favour of the ANC and other opposition parties. It was the only budget-related item that did not pass.
According to the legal opinion given by Robert Stockwell SC of Group 21, all of the components of the annual budget have to be considered and approved in the same meeting.
“In short, the budget’s approval failed at the council meeting held on 29 May 2018.
“One of the essential resolutions making up the annual budget was not approved and the budget, in its entirety, must therefore be reconsidered,” Stockwell said in his opinion.
The EFF acted as kingmaker in the metro following the 2016 local government elections. Without the party’s votes in the metro, the DA-led coalition does not have a majority to pass items
without the ANC’s support. The EFF made it clear that it rejected the rates and tariff increases proposed in the budget and that other streams of income should be sought because, the party claimed, the poor funded the rich in the 2018-19 budget.
The increases in tariffs in the budget, however, came mostly from external increases.
The proposed 7.37% increase in electricity tariffs for the 201819 financial year was largely based on the application of the National Energy Regulator of SA municipal guidelines.
The proposed average tariff increase for water, sewerage and sanitation services for was 14.2%, based on the Rand Water tariff increase of 12.2% and includes a 2% retail margin aimed at improving and maintaining the distribution network.
It still remains to be seen if the EFF will change its stance on the rates and tariff increases, without which the budget cannot be passed.
Silumko Mabona, EFF Johannesburg secretary, said that the party stood by its demands but it would see what proposals the coalition brought to cushion the poor.
Tanya Heydenrych, communication specialist in the mayor’s office, said they could not comment on matters before council.
“We will, however, communicate upon conclusion,” Heydenrych said.