27 February 2025
*Note to Editors: This speech was delivered during today’s Joburg Ordinary Council Meeting
Madame Speaker, it is no secret that our city is on the brink of bankruptcy and while the adjustment budget appears to have been creatively crafted to paint a pretty picture and install confidence, reality is that is plagued with issues.
GOOD notes that the budget assumes a reduction in debt impairment by R1.3 billion, based on projected revenue collection improvements. Our concern is that if these projections do not materialise, which they haven’t in the past, the City risks falling into further financial distress.
There is also an over-reliance on Internal Transfers, which have increased by R1.4 billion, this does not necessarily reflect real revenue growth but rather a reallocation of existing funds. This may mask underlying financial instability.
Speaker, Joburg residents have been failed multiple times by this council, in the eyes of our residents, service delivery has completely collapsed, however, the adjustments prioritize administrative and salary expenses over direct service delivery.
With limited additional funding for key infrastructure projects, residents may continue to experience challenges in water, electricity, waste management, and road maintenance.
Service delivery has to be the top priority.
Furthermore, the City’s current Creditor payment ratio remains below 1:1, meaning it is unable to pay creditors within 30 days. Without concrete financial recovery plans, this could erode supplier confidence and service delivery efficiency.
The budget explicitly states that it is not intended to address additional funding needs, forcing departments and entities to reprioritize within existing allocations. This could further hinder urgent service delivery interventions.
We also note the increase in bulk electricity purchases by R500 million, which despite ongoing non-technical losses, suggests inefficiencies in the City’s revenue management. The budget assumes a reduction in electricity losses from 29.07% to 28%, which may be overly optimistic given past performance.
Regarding the Capital Adjustment Budget for the 2024/25 Financial Year:
The capital budget has been increased by R318.6 million, yet there is no clear justification for how these additional funds will address critical service delivery backlogs. The budget should prioritize urgent infrastructure development over administrative adjustments.
Speaker, the budget allocates R92.8 million to the Energy Efficient Programme, significant reductions have been made in essential infrastructure projects, such as the refurbishment of substations, emergency transmission work, and bulk electricity infrastructure. This raises concerns about whether the City’s immediate power supply challenges are being addressed.
There is also a notable reduction in Public Safety Funding. The capital allocation for Public Safety has been cut by R8.4 million, with JMPD losing R5.5 million and Emergency Management Services losing R2.9 million. Reducing investment in law enforcement and emergency response infrastructure is concerning, especially in a city facing rising crime rates and disaster risks.
GOOD notes with regret cuts to Critical Housing Projects.
The Human Settlements budget was adjusted with significant reductions in various housing projects, including:
▪ Formalization of informal settlements (-R165 million)
▪ Hostel redevelopment projects (-R5 million each for multiple locations)
▪ Bulk infrastructure for new housing developments (-R35.5 million for Eikenhof Substation and other areas)
These cuts undermine efforts to provide sustainable housing solutions for vulnerable communities.
Furthermore, the budget cuts funding for major water and sewage replacement projects, such as:
▪ Soweto Planned Water Main Replacement (-R6.5 million)
▪ Orange Farm Sewermains (-R6.6 million)
▪ Halfway House Water Upgrade (-R76 million)
Given the City’s history of water shortages and infrastructure failures, these reductions could negatively impact service delivery.
Speaker, there is also a failure to address Public Transport shortcomings.
The adjustments show R80.7 million in cuts to BRT Phase 1C Roadways and R27.3 million removed from the Selby Bus Depot.
These reductions contradict the City’s commitments to expanding public transport and reducing reliance on private vehicles.
In conclusion, GOOD believes that the adjustment budget does not do enough to address the pressing issues which affect the residents of Johannesburg daily.
We are unable to support the adjusted budget in its current form.
Media enquiries: media@forgood.org.za