Joburg council passes adjustment budget on second attempt

The City of Johannesburg finally passed its adjustment budget for the year 2024/25 in council on Thursday.

This was the second attempt after the first sitting collapsed. A total of 105 councillors, including from the DA and ActionSA, rejected the proposed budget, while a majority of 138 councillors from the ANC-led government of local unity secured a victory.

The DA argued that with increasing pressure on the city’s residents and financially overstretched citizens of the country, it would prove difficult to convince their caucus that the city’s coffers would improve from revenue collection.

DA councillor Chris Santana conceded they were not opposed to the whole budget, albeit planning to vote against it.

“We need the budget to focus on infrastructure at Joburg Water and City Power. The other aspects of the budget seem reasonable, though we are in slight disagreement,” he said.

“The second quarter report reveals that the revenue collection rate has decreased to 84% vs our stretched target in the adjustment budget which is 88.6% — we don’t foresee that we will be collecting that amount of money any time in this budget.

“The forecast we are predicting is negative and our collection rate will decline even further. This is the reality, never mind the VAT we are looking at on behalf of our residents. And yet I do not see a substantial resolution to council in looking at the institutional review we have been requesting, which would include bringing down our employee costs and reducing the burden on our ratepayers.”

ActionSA, which oversees the legislature through its speaker Nobuhle Mthembu, said it would not vote for the budget unless the electricity surcharge was scrapped.

ActionSA demanded that the executive mayor leave the council to address a handful of protesters outside the chambers who were demonstrating against the surcharge.

However, the ANC dismissed the move as grandstanding with no understanding of the municipal statutes that govern the budgeting process.

The ANC’s Thapelo Radebe clarified that the guidelines do not allow for a change in municipal tariffs during an adjustment budget, and that they can be reviewed only during an annual budget.

“There are certain parties in this house who feel that it is correct to go out there, mobilise our people under false information and tell them to come protest without proper explanations,” he said.

“This is because they want to grandstand, for political mileage. Let’s clarify, ActionSA says if the surcharge isn’t withdrawn, then they will not support the budget. The context here is that we are guided by the Municipal Finance Management Act and statuses which govern how we do things.

“When you do an adjustment budget, there are certain aspects you can touch and some you cannot. You can adjust on issues like overspending and fixing shortfalls but regarding tariffs and charges you are not allowed to tamper with them. It is impossible to do what ActionSA is saying, their behaviour is populist and should be condemned. The annual budget is coming, that’s where we can look into changing charges and tariffs like the surcharge from City Power.”

Radebe said the city must undergo a similar process to the one it undertook to implement the surcharge, should it seek to reverse it.

“Section 74/75 of the Systems Act tells us that since the charge has gone through a public participation process, tariffs that need changing require the same consultation and public participation process. What ActionSA is doing is wrong and should be exposed.

“In the previous sitting we debated the matter to a deep extent. First, the city has gone through a turbulent period where we are trying to move from past financial difficulties to prosperity. We have to rebuild the city’s finances.”

Finance MMC Margaret Arnolds thanked the council for approving the adjustment budget, and councillor delegations from different party caucuses who constructively engaged on the budget consultations.

Arnolds promised to strengthen collaboration among political parties and accommodation of their respective wish lists before the next annual budget to be drawn up for the 2025/26 financial year.

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