Latest news with #R54.6
IOL News
18-05-2025
- Business
- IOL News
Tshwane's 2025/2026 budget: A risky reliance on property tax revenue
The Freedom Front Plus expressed concerns about City of Tshwane's 2025/2026 budget, citing its dependence on property tax revenue and potential financial risks. Image: Jacques Naude/Independent Newspapers The Freedom Front Plus has warned that the City of Tshwane's fully-funded budget for the 2025/2026 financial year relies heavily on increased property tax revenue, making its funding status more of an assumption than a certainty. Deputy Mayor Eugene Modise last week presented a R54.6 billion budget, comprising a R2.4 billion capital budget and a R52.2 billion operational budget, describing it as pro-poor and focused on service delivery. The multiparty coalition partners in Tshwane, including the ANC, EFF, and ActionSA, praised him for presenting a fully funded budget that had been endorsed by National Treasury. 'This is the first fully funded budget since 2022 and represents a significant milestone in our turnaround strategy for Tshwane. It is a clear indication of our coalition commitment to responsible governance, sound financial management and inclusive service delivery to all communities in the City,' the parties said. FF Plus councillor Peter Meijer criticised the funded budget, saying it is primarily based on increased property tax revenue, which has already drawn criticism from the party. 'At this stage, it can only be considered an assumption since the process surrounding the revision of the valuation roll, which determines the increase in property tax collection, has not yet been finalised,' he said. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Meijer noted that the budget speech's mention of settling Eskom debt has been praised, but argued this is simply compliance with a court order, not an actual achievement. 'If the court order is not complied with, it could plunge Tshwane into a financial crisis,' he said. He also said reducing the debtors' book from nearly R30 billion to R25 billion is being touted as a success, attributed to improved revenue recovery and a recent overdue debt write-off scheme. 'However, since no concrete figures have been provided, the question remains whether collection efforts have been successful in comparison to the debt write-off, and what impact this has on cash flow,' he said. He warned that if creditor obligations are not settled, they could undermine any perceived financial progress and limit Tshwane's ability to allocate resources effectively. "Persistent creditor liabilities can also affect investor confidence, as they signal potential liquidity challenges. Without clear strategies for settling these debts while maintaining financial stability, the risk of cash flow shortages increases—making budget sustainability a pressing concern,' he said. Kholofelo Morodi, Member of the Mayoral Committee for Corporate and Shared Services, welcomed the fully-funded budget, highlighting its commitment to critical infrastructure projects that will improve electricity stability, connectivity, and public safety. Morodi, who is a political head for Region 4, said the investment demonstrates a commitment to providing residents with reliable infrastructure that meets their needs. 'Key initiatives such as the Eldoraigne, Olievenhoutbosch, Noordwes, Claudius, and Cornwall Hill Substations, as well as the Louwlardia supply augmentation, play a crucial role in reinforcing our power network,' she said. She added that installing remote terminal units and fibre will enable real-time monitoring and improve service responsiveness, while high-mast lighting will enhance community safety by illuminating public spaces. The multiparty coalition parties said: 'We particularly commend the decision not to rely on borrowing. The positive revision of the City's credit outlook, and the transparent and consultative process followed in arriving at this credible financial plan.'
The Citizen
16-05-2025
- Business
- The Citizen
Tshwane's R54.6bn budget draws mixed reactions
Tshwane deputy mayor Eugene Modise's 2025-26 budget promises no new borrowing and a fully funded plan. There has been mixed reaction to the City of Tshwane's budget for the 2025- 26 financial year. Deputy mayor and MMC of finance, Eugene Modise, delivered the budget for the 2025-26 financial year which he said National Treasury had endorsed as credible and fully funded. Modise described the budget as a turning point and said the draft included an allocation for the capital budget of R2.4 billion and an operational budget of R52.2 billion. 'Fully funded without borrowing' His budget also included a total of R7.4 billion grant allocations for operational grants and capital infrastructure through the newly introduced Urban Development Financing Grant. 'It is important to note that this budget has been fully funded without borrowing. While no borrowing is planned for the 2025-26 financial year, this may be reconsidered in future, subject to the city's financial recovery and improved credit rating,' he said. Modise's proposed tariff adjustments include electricity tariffs to rise by 10.1%, below the 11.32% bulk tariff increase from Eskom, while water charges will increase by 13%, lower than Rand Water's 15.13% hike. ALSO READ: Here is how Tshwane will be spending its R54.6 billion budget Sanitation tariffs will increase by 6%, followed by waste removal tariffs which will rise by 4.6%. 'Nothing new' Republican Conference of Tshwane councillor Lex Middelberg didn't believe Modise's claim that Treasury had endorsed the budget. 'Treasury doesn't endorse budgets. The budgets do not make allocations for the release of R29 billion on creditors that have heaped up from previous years. Middelberg said the budget as a whole was an adjusted version of budgets of previous financial years. 'There's nothing new in there, the spending patterns in the city do not change. Same old, same old,' he said. Praise from ActionSA Action SA leader Herman Mashaba welcomed the tabling of the first fully funded budget since 2022, led by one of his own, Nasiphi Moya. He also welcomed the R780 million allocated to economic development and spatial planning, saying it aligned with the city's economic revitalisation strategy, which aims to attract over R17 billion in investment and create 80 000 jobs. ALSO READ: The state of the capital: Three major problems Tshwane promises to fix 'ActionSA believes this budget acknowledges the severe infrastructure challenges inherited from years of chronic mismanagement and underfunding, which brought the city to the brink of collapse and represents a commendable turning point through targeted investment.' Mashaba said the party was proud of the City of Tshwane's remarkable progress in achieving the goals set out in its turnaround strategy. DA rejects budget DA Tshwane spokesperson for finance Jacqui Uys said her party would not support the new budget. Uys said the budget put the responsibility of financial rescue instability onto residents, treating them like cash cows. 'The DA maintains that the city must increase the section of property value not included in rates and taxes to R450 0o0 to bring relief to your pockets. Instead of assisting poor households who cannot afford almost R500 per month for waste removal, the ANC-led City of Tshwane has opted to introduce a punitive tax of almost R200 on these households if they choose not to use the city's services,' she said. NOW READ: City of Tshwane says overtime cap won't stall emergency services
The Citizen
15-05-2025
- Business
- The Citizen
Here is how Tshwane will be spending its R54.6 billion budget
The City Of Tshwane will spend more than R125 million on government work programmes while aiming to raise an extra R17 billion through investment. The nation's capital will dedicate more than a billion rand to infrastructure maintenance for the coming financial year. The City of Tshwane (CoT) tabled a draft budget of R54.6 billion for the 2025/26 financial year in council on Thursday. Deputy Mayor and MMC for Finance Eugene Modise said it was a proud moment for the city, but the opposition benches stated the budget places the city's financial burden on the residents. Increased revenue generation The budget will be split into an operational budget of R52.2 billion and a capital expenditure budget of R2.4 billion. Additionally, grant allocations include R5.5 billion in operational grants, R2 billion in infrastructure grants and R152 million through a new urban development financing grant. Tariffs are set to increase despite Modise noting that the city has seen a 2% increase in revenue generation, amounting to R777.5 million. The higher tariffs for Tshwane residents include a 10.2% increase in electricity, a 13% increase in water costs, and a 4.6% increase in refuse removal. However, Modise has placed a 4% reduction in property rates on the table. Modise said the city had decreased its expenditure on employees by 3%—R346.5 million—and reduced its own penalty fees by R71 million—a 32% reduction compared to last year. 'It translates our vision into action, outlining how we intend to meet the urgent needs of our residents while building a stronger, more sustainable city,' stated the Deputy Mayor. Money for jobs Jobs were an expected theme of the budget, with Modise stating that R740 million would be allocated to the economic and spatial planning department for unemployment interventions. This would be to support SMMEs, youth-owned enterprises, cooperatives and their VIP business line — a service for the city's top 200 businesses. The city aims to attract R17 billion in new investment, with the hope of creating 80 000 new jobs by 2029. Further investment in government employment programmes will see R49.2 million and R76 million go toward 11 034 extended public work programme opportunities and the public employment programme, respectively. A proposed R21 billion allocation will go towards energy and electricity infrastructure, with that being a small part of the city's infrastructure drive. 'This budget seeks to develop a culture of maintenance of its assets, and in doing so, we have allocated R1.4 billion for repairs and maintenance. This is to ensure that we break the cycle of letting our infrastructure decay,' The achievement of growth targets will be aided by maximising the potential of facilities such as Wonderboom airport, events centres, economic hubs and tourist attractions. 'Revenue generated from these assets will augment our service delivery efforts and assist us in achieving our economic growth target of 3.9% by 2029,' stated Modise. New levy for waste Democratic Alliance shadow MMC for Finance Jacqui Uys said Modise's budget shifted responsibility for the city's financial stability onto the residents. 'This budget is not serving the residents of Tshwane, but becomes part of the ANC's quest to look good on paper but fail in its real mandate – delivering services,' Uys told The Citizen. The city wishes to introduce a new R194 cleaning levy for households without a waste account, which will generate an extra R400 million from waste collection. 'The same draft budget proposes a decrease in spending on waste collection and illegal dumping from R2.1 billion in the current year to R2 billion in the next budget cycle,' said the shadow MMC. 'This clearly indicates that the intention of this new levy is not to ensure a cleaner city, but rather the introduction of yet another tax to use the residents of Tshwane as a stopgap to improve the city's financial position,' concluded Uys. The debate of the speech and the vote to approve the Integrated Development Plan is scheduled for 29 May. NOW READ: Drive to repair Tshwane's 'five' potholes
