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STATEMENT BY THE CITY’S MAYORAL COMMITTEE MEMBER FOR FINANCE, COUNCILLOR JOHAN VAN DER MERWE

The City of Cape Town notes the reports of senior management increases for the 2018/19 financial year of 17% and upwards.

This is incorrect. The City has budgeted for an increase of 7,1% for the 2018/19 financial year.

Regrettably, an error crept into an external annexure table in the City’s tabled (draft) budget. The typo caused the figure to read 17% and not 7,1%. The City sincerely apologises for this error. Such errors really are uncharacteristic of our budgets. This has not impacted on the budget numbers and amounts in any way. The figure was only stated in one particular table, which serves as an annexure to the budgeted amounts-related information. This reporting error will be corrected when the final budget is adopted in May 2018.

No South African Local Government Bargaining Council Agreement is in place for 2018/19 and the rest of the medium term. The Bargaining Council is expected to meet early in December to discuss the local government wage curve and the cost of living adjustments for 2018/19.

For the 2018/19 financial year, the predicted Consumer Price Index increase (of 5,1%) plus 2% was provided for in the budget in the absence of a wage agreement.

The 2018/19 Medium Term Revenue and Expenditure Framework, prepared with provision for salary increases, reads as follows:

2018/19 2019/20 2020/21
7,10% 6,60% 6,40%

We hope that this sets the record straight.

It would be regrettable if organisations and lobby groups continue to espouse this information which has now been publically corrected in their efforts to advocate against the City’s budget and proposed vital tariff increases.

It must be noted that, in drafting its budget, the City has followed all National Treasury directives for sound financial management during tough times especially, including:

· improving the effectiveness of revenue management processes and procedures

· paying special attention to cost containment measures

· looking at the affordability of providing free basic services to all households

· curbing consumption of water and electricity by indigent people, not to exceed their allocation

· ensuring value for money through the procurement process

In addition, no growth was applied to particular employee-related allowances and overtime provisions were curbed across the board except for labour-intensive directorates and essential services.

The impact of the current water crisis is clearly evident in this year’s budget. There is a need to increase our water and sanitation tariffs substantially to enable us to continue supplying water and providing sanitation services. No profit is made from tariffs.

The City has already reprioritised some R2,6 billion of its existing budget and the tabled budget includes strict budget cuts and curtailment in an effort to help the City to pay for the effects of the worst drought in recorded history.

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