Cape Town ‘can deal with deficit’

The Cape Chamber of Commerce and Industry said yesterday that the City of Cape Town should not have too much difficulty trimming R1.7 billion from its massive budget of over R44 billion in order to overcome a large shortfall brought on by the crippling drought affecting the region.

The chamber’s comments follow after the city proposed introducing a drought levy to compensate for the loss in revenue as a result of ratepayers implementing water-saving initiatives and also for the funding of future water-related projects.

The Cape Chamber has rejected the levy, along with tens of thousands of Capetonians who have responded via public comment, pointing out that the municipality is the biggest business in Cape Town, employing nearly 27 000 people and with a budget of R44.3 billion, meaning that a R1.7 billion cut would amount to just 3.8% of the total budget.

“This should be a fairly straightforward exercise and well within the council’s capability,” said Janine Myburgh, president of the chamber.

“Any large business in a similar situation should be able to do it.”

Myburgh added that “making the job even easier is the fact that there is a good deal of padding in the spending plans, as officials generally make sure that they overestimate costs to cover themselves in the event of unexpected cost overruns”.

“Last year, for instance, the underspending on the operational budget amounted to 5.2% and the municipality finished the year with R3.8 billion cash in the bank.

“The city should get to work on the cuts without delay.

“We are dealing with an emergency situation,” she said, adding that the place to start would be the mayor’s directorate which had a budget item of R41.8 million.

“This money, according to the presentation we saw on the draft budget, was to be used for the activation of the Cape Town to Miami air route, propagation of the Invest Cape Town brand and the Atlantis SEZ, and other similar projects.”

Myburgh added that “the problem here, is that this is work that Wesgro does and does very well.

“It looks to me like duplication, so there would be an easy cut and a good way for the mayor to lead by example”. – ANA