POLITICS

Joburg’s prospects for increased revenue – Herman Mashsaba

Mayor says it is clear that the City has challenges that far exceeds the ability of budget to resolve

Study confirms City’s prospects for increased revenue 

18 September 2017

Last week, I received a report that sampled 7000 households and commercial properties in areas classified as middle and upper-class suburbs. This report has produced the staggering result that, in this sample group, 1166 properties (16.6%) were not being billed by the City.

Upon coming into office, it became abundantly clear that our City has challenges that far exceed the ability of our budget to resolve. Equally apparent, was the fact that the City’s revenue and billing systems were in a mess, an environment in which corruption has flourished.

Indeed, in recent weeks, several officials within the City have been arrested and suspended following allegations of claiming fraudulent refunds on behalf of property owners, collusion with property owners to inflate refunds due to them and in some instances, tempering with meter readings and credit control measures.

It was on this basis, that I initiated a revenue optimisation program, with a view to improving our efficiencies rather than passing on tariffs increases beyond inflationary levels. This program has seen an analysis of where the City is losing revenue, with a view to correcting these inefficiencies and raising more revenue to address service delivery needs. Our City faces a 10 year R170 Billion unfunded infrastructure backlog, and a historic under-investment in repairs and maintenance.

In our first budget planning cycle, I insisted that we budget for an additional R1 Billion in revenue on the basis of our assessment of the potential to improve our revenue collection. This was workshopped with National Treasury and they agreed. Despite this, this particular subject has been recently criticised by the ANC as being unrealistic. In fact, the basis of the ANC’s call for a motion of no confidence in myself was on the misguided perception that the City was at risk of financial ruin. I believe this study demonstrates otherwise.

The ability to identify those households and commercial properties who can afford to pay, are consuming services and not being billed is critical to our success. Our City faces enormous challenges and backlogs that require us to raise more revenue to address. I have committed our City to being pro-poor and redressing the shocking inequalities that persist 21 years into our new democracy.

To achieve this, and to make the kind of impact that provides hope to our residents, we must raise more money. When one considers this sample study across the City, the magnitude of potential to raise more revenue is enormous.

My belief has been vindicated that it will be by improving our own efficiencies rather than passing on unfair tariff increases, we will be able to raise more revenue. We cannot have those who can afford to pay, not being billed for services while so many live without the dignity of basic services.

Issued by Luyanda Mfeka, Acting Director of Communications, Office of the Executive Mayor, 18 September 2017