Cape Town – Mayor Jordan Hill Lewis asked Finance Minister Enoch Godonwana not to propose cuts in local government funding this week when he tabled the National Budget 3.0.
Ahead of the revised budget projected on Wednesday, Mayor Hill Lewis said billions of rands may be needed to balance the budget, but this should never be done to cut municipal allocations and infrastructure funding.
“There is sufficient waste and excess that the central government can cut to balance the budget. We are totally opposed to the reductions that are passed on to local governments, or in fact further reductions in infrastructure spending,” Mayor Hill Lewis said Monday.
“The central government cannot lament the state of the city and then continuously cuts the allocation of local government infrastructure and service delivery whenever it is necessary to find money.”
As part of the national cuts in 2023/24, over R107m has been cut from grant funding to Cape Town.
Metro claims that from 2020 onwards, it can spend at least 99% of all grant funding to upgrade informal settlements and provide free housing measures to the poorest people, providing as many grants as the central government.
Mayor Hill Lewis has also called for Cape Town to gain a fair and fair share from the national finances, based on updated census figures showing that Metro is trying to overtake Johannesburg as the most populous city with nearly five million residents.
“It is important that our metro receive fair and equitable equity funds in line with our population growth, so that Cape Town can sustainably provide free basic services to the poorest people,” Mayor Hill Lewis said.
“To subsidize free basic services, Metro will use both equity funds and property fees.
“If citizens' funds decrease, property fees must compensate.
“Currently, cities and their fee payers must already absorb the impact of the R243 million decline on Cape Town's fair share on 2025/26 compared to those registered in the Official Gazette in the 2023/24 Revenue Act.”
The mayor also urged the Finance Minister to pledge to introduce a new infrastructure funding scheme in the city in 2024, President Ramaphosa's Sona.
“Cape Town has invested South Africa's R3.97 billion record in infrastructure over three years, with 75% of which directly benefiting low-income households,” said Mayor Hill Lewis.
“But we want to do more, in fact, we need to consider the urgency of investing in sustainable water, sanitation, electricity, roads and other infrastructure.
“It is important for the Finance Minister to follow the President's commitment of the city's new innovative infrastructure funding scheme, along with measures to simplify regulations and reduce red tape.”
Meanwhile, the Good Party said: “Minister Enoch Godonwana is preparing to table a third version of the budget, so for months it is time to acknowledge that the issue is no longer about things on and off the budget.
“The deeper question is how budgets are built in the first place.
“The process is chaotic and exclusive, revealing how inappropriate the current budget production framework is for the National Unity Government (GNU).
“We are urgently needed a new comprehensive protocol and decision-making structure that fits the Union era.
“The GNU needs adjustments, consultations and compromises, not ambushing or ultimate.”
Good Party Secretary-General Brett Herron said his party's preferences are clear that revenue measures should be aimed at people with the greatest measures, not at least the greatest measures.
He said that the good party has consistently provided implementable and progressive alternatives that enhance equity without compromising economic growth.
Reduce tax credits that favor wealthy people, such as the R350,000 tax-free retirement savings cap and medical tax credits. It will eliminate ineffective employment tax incentives that cost billions of dollars and indicate a limited impact on employment. To help close the short-term revenue gap, consider a temporary drawdown from your gold and forex emergency measurement spare accounts. The transition to zero-based budgeting to eliminate waste and reallocate resources from scratch. We will introduce wealth taxes targeting ultra-high net individuals to begin tackling South Africa's extreme inequality.
“But I don't want to see the negotiations and deliberations over the past three months that will reduce government spending and increase revenues on government bonds, bringing about austerity budgets,” Heron said.
“It cannot be the result of collective efforts in democracy that are intended to serve people.
“We opposed regressive income proposals, but Good has consistently supported the spending side of the budget.
“In both failed versions, we supported our commitment to social spending, education and infrastructure, which should be held at budget 3.0.”
