How Joburg plans to spend R89 billion

The Citizen

6 days ago

For the 2025/26 financial year, Johannesburg will have an operating revenue of R84.8 billion
The council chamber of the City of Johannesburg. Picture: Neil McCartney / The Citizen
City of Johannesburg Finance MMC Margaret Arnolds has tabled a R89 billion budget to address the city's service delivery challenges.
Arnolds delivered her first budget speech at the Connie Bapela Council chambers in Braamfontein on Wednesday.
The primary driver of this growth in total revenue is the rise in service charges, mostly for water and electricity.
'Revenue for 2025/26 reflects a 9.3% increase compared to the previous year. This Increase is primarily driven by service charges, which account for the largest share of the City's revenue base.'
Electricity service charges are budgeted at R25.6 billion, up by 12.5%.
'This reflects the approved tariff increase of 12.41%, which is a pass-through from Eskom.
'There is also a focused plan to reduce technical and non-technical electricity losses from 28% to 25.8%,' said Arnolds.
Water and wastewater charges will generate approximately R20 billion, up 11.8% from the current year.
'This will be underpinned by an average tariff increase capped at 13.9%, despite a Rand water increase of 15.3%,' she said.
Refuse removal revenue increases by 6.4% to R3.3 billion, with service reliability a core deliverable tied to the tariff increase of 6.6%.
Property rates, the City's second-largest revenue stream, are expected to generate R18.1 billion, reflecting a 4.6% increase.
Arnolds described this as a funded budget even through the city has been struggling with rate collection over the years.
Keeping the lights on in Joburg
R4.6 billion has been allocated to City Power over the next three years.
This is meant to stabilise the grid to prevent collapse and strengthen the network to improve efficiency.
'This is also meant for the expansion of the grid to meet growing demand, prevent system collapse due to the ever-growing and changing energy landscape and to ensure revenue enhancement and reduction of technical losses,' said Arnolds.
Water and Sanitation
Johannesburg Water will receive the second-largest capital allocation of R5.6 billion over three years to address both service backlogs and infrastructure failure hotspots.
The city will invest in new sewer connections to informal settlements and densified townships.
Roads and Mobility
At least R2.8 billion has been allocated to Johannesburg Roads Agency (JRA) for upgrading high-traffic corridors linking townships to economic centres, particularly in Diepsloot, Soweto, and Lenasia.
On the other hand, R400 million has been allocated for expanding stormwater infrastructure in Orange Farm, Ivory Park and Braamfischeville, to prevent flash flooding.
JMPD
The Johannesburg Metro Police Department (JMPD) will be empowered by a R16 million investment in Public Safety.
This will enable the city to fight crime using the latest technology.
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A pro-poor budget?
Arnolds said the city had come up with a tariff strategy which is balanced and progressive.
'It ensures services are funded sustainably without excessive burdens.
'It also ensures indigent households continue to benefit from the Expanded Social Package (ESP).
'We are in the process of reviewing our ESP policy to be more inclusive and allow access to more vulnerable individuals,' she said.
Arnolds said the city had the poor in mind when crafting the 2025/2026 budget.
'In this budget, all residents will continue to receive the first 6 kiloliters of water for free,
'Expanded Social Package (ESP) qualifying residents receive up to 15 kiloliters of free water, 50 kilowatt hours (kWh) of free electricity, free sanitation, and refuse removal because in Johannesburg, we believe that basic services are a human right, not a privilege,' she said.
Pensioners will receive up to 100% rates rebates on homes valued up to R2.5 million.
'Indigent households, child-headed families, people living with disabilities, and the unemployed are supported through targeted rebates and subsidies on municipal services, housing, and transport,' she said.
Arnolds said the city will keep the prepaid electricity surcharge unchanged at R200 (excluding VAT).
She said this is a deliberate act to protect the poor against rising energy costs.
'This budget makes it clear: we will not govern in a way that reproduces inequality. Our pro-poor programme is a political choice – rooted in the values of equity, dignity, and redress.
'It is a signal that in the City of Johannesburg, no one will be left behind. Not on our watch,' she said.
According to Arnolds, employee-related costs remain the largest expenditure item, aligned with the Multi-year Collective Bargaining negotiated agreement of 5.35% salary increase.
She said repairs and maintenance spending has been ringfenced and increased to address ageing infrastructure, with a growing share of operating directed toward proactive maintenance over reactive fixes.
She said contracted services and professional fees have been limited in growth.
'This ensures the city does not outsource its core responsibilities unnecessarily,' she said.
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