A 6.4% pay hike in the midst of crisis – the city’s idea of belt-tightening. From Moneyweb.
Residents of Joburg are being asked to comment on the city’s latest budget proposals – and they probably should.
The city councillors propose awarding themselves a 6.4% pay increase this year, while multiple surveys show that most South Africans are bleeding as a result of the Covid-19 lockdown.
The city’s electricity rates are budgeted to increase 8.1% this year, and water and sanitation by 8.6% each. Property rates are budgeted to increase 4.9% but could end up increasing 7% for some.
This might pass unnoticed in any other year, but not in the midst of an economic crisis. And certainly not when you have participative democracy campaigns being run by the likes of Dear South Africa and the Organisation Undoing Tax Abuse (Outa).
First, some context: a survey by TransUnion shows eight out of 10 South Africans have suffered a drop in income, averaging R7 500 during the pandemic.
Startup incubator 22 on Sloane believes more than 55 000 SMEs in SA will not survive Covid-19, with at least 43 000 employees in those businesses set to lose their jobs. The African Management Institute (AMI) found that 87% of small businesses in Africa fear they may fail. Business For SA says up to four million jobs in SA could be lost.
Not a pretty picture.
Outa project manager Tim Tyrrell says the budget is an insult to the sacrifices made by city residents who have endured salary pay cuts, retrenchment, or the closure of once-vibrant businesses in the name of flattening the curve.
Yet the councillors propose lumping city residents with an additional R843 million bill for councillor and staff pay.
DearSA campaign head Rob Hutchinson says the budget proposals show extreme insensitivity for the pain being felt by all South Africans and Joburg city residents in particular. “This is especially true at a time when the city’s infrastructure has not been properly attended to for years.”
Particularly worrying for some is the increase in the base electricity charge, which could mean some households end up paying 40% more, and the scant relief for Covid-19, for which the city has made a R140 million provision.
Astonishingly, Covid-19 gets a single mention in the entire budget.
“The City of Joburg had at least three months to plan for the impact of Covid-19 since we first became aware of its severity, yet it seems to have treated it as an afterthought,” says Tyrrell.
He points out that for every R10 invested by the city in plant, property and equipment, an additional 8% is supposed to be set aside for repairs and maintenance. However, this has not happened since 2009, resulting in a repairs and maintenance underspend of R28.6 billion over the last 11 years. This explains the general deterioration of roads and other infrastructure over the last decade.
According to National Treasury recommendations, local government is supposed to ringfence an additional 80 cents for every R10 spent on repairs and maintenance, but this has generally been seen as a way to redirect budget funds elsewhere. As a result, Joburg is planning to spend just 59 cents for every R10 earmarked for repairs and maintenance in the year ahead.
Comments from Joburg residents received by DearSA show their exasperation:
- “Expect non-compliance. We are sick of lining government’s pockets.”
- “Salary increases? Why? We are in a recession and will be for a while. We have less people paying bills and yet you want to increase salaries.”
- “City of Joburg does not deserve increases if they cannot supply proper services constantly.”
- “Weekly, my water gets cut for hours due to maintenance repairs.”
- “There is something seriously wrong with any increases above inflation.”
What really seems to irk commentators is the extent of salary increases over the years.
Between 2016 and 2020, average salaries have gone up 56%, well above the inflation index. From the comments received so far, it’s clear that residents are outraged by the proposed salary increases amid claims that the city infrastructure and service delivery has deteriorated.