Budget Speech 2003

Mr. Speaker, Fellow Councillors, Honoured Guests, Ladies and Gentlemen.

Today we table before Council our first multi-year budget for the years 2003 – 2004, 2004 – 2005 and 2005 – 2006. This is the third budget in our term of office and so far, the most significant because it has been compiled as a transformation tool to effect a final rupture with the past and to put us firmly on the path to realise our collective vision of a better life for all.

The Multi-year budget stands as follows:

Our budget priorities for this financial year are:

1. To give priority to the eradication of poverty by continuing to address the basic needs of our people especially water and sanitation in rural areas.
2. To reduce vulnerability and strengthen our peoples livelihood strategies by extending Free Basic Services throughout the Municipality.
3. To strengthen our peoples livelihood strategies by creating economic opportunities through the promotion of Local Economic Development.
4. To play our part in the fight against HIV-AIDS.
5. To accelerate the transformation of our municipal structure to focus on service delivery, customer service, community empowerment and local economic development.
6. To work towards the normalisation of the distorted spatial settlement patterns and the building of safe and sustainable communities.

In pursuing these goals we shall seek to create jobs, involve and empower our people and promote economic development.

Mr. Speaker before we elaborate on the major contents of the budget, we need to pause, stand back and see where we stand in relation to where we come from and where we want to go. When we adopted the interim Integrated Development Plan in 2001, we put as our Vision

“A safe, prosperous and caring Municipality, free of poverty and inequality: promoting participatory development and providing sustainable quality services for a better life for all”

This vision together with our mission was affirmed in our Integrated Development Plan that we adopted in August 2002.

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Implied in this vision is the fundamental principle of the Reconstruction and Development Programme – that development is about people and that it is the people who must drive it. In his budget speech in February 2002, Trevor Manuel, the Minister of Finance pointed out that:

“ Development is not only about large scale infrastructure projects, wide-ranging income support or high profile health campaigns. For many, real development happens when people’s access to services and opportunities, within their own communities, improves”.

As the Reconstruction and Development Programme points out, “our people with their aspirations and collective determination are our most important resource… (we should) focus on our people’s most immediate needs and (rely), in turn on their energies to drive the process of meeting these needs. Regardless of race or sex, or whether they are rural or urban, rich or poor, the people of South Africa must together shape their own future”. Development is not about delivery of goods to a passive citizenry. It is about active involvement and growing empowerment.

It is these principles, which put the people at the centre and in the driving seat of development, that must inform our concept of poverty and of development they must inform our planning, our performance and our measurement of that performance.

Thus in looking back over the last two years we should measure the distance we have travelled, not in terms of the number of projects we have rolled out but in terms of the number of lives we have changed.

Over these last two years we have touched the lives of tens of thousands of our people in rural villages within our Municipality. We have lightened the burden of many mothers who used to spend many hours in the drudgery of fetching water and collecting firewood instead of engaging in more productive activities. We have helped to enlarge their choices and raised their opportunities to build sustainable livelihoods.

Mr. Speaker in our quest to translate our political freedom into human development we have to put the people first. We can no longer afford to approach the development of our communities like Father Christmas bringing toys to sleeping children. As a developmental Municipality it is our responsibility to mobilise, inform, educate and empower our people to expand their livelihood assets and capabilities… to participate in, negotiate with, influence, control and hold accountable institutions that affect their lives and their well being. Our people should be the means and the end of development.

Guided by these principles we have put community participation and communication at the centre stage of our activities and programmes to ensure that these are guided and informed by the true aspirations of our people and that they meet their current needs.

At another level we will also be establishing a local economic advisory committee which will be made up of representatives of organised local business, some individual business people and experts. The aim of this committee will be to create consensus and to ensure that this Municipality plays its part in creating opportunities, attracting investments and generating the economic growth that will assist in eradicating poverty.

Mr. Speaker, the transformation of our society is not an event. It is an ongoing process that will continue long after our time. It is also a process that will sometime accelerate and sometimes slow down depending both on its internal motive forces and the material conditions in which they operate.

The last two and half years have seen the most far reaching changes happening in local government. These changes are continuing at an accelerated rate.

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Mr. Speaker, today we are proud to report that we have succeeded in effecting some of the most far-reaching transformation of our Municipal Structures to fit in with the new tasks and challenges.

Over the past twelve months we have started the process of dismantling the old apartheid monolith and to infuse a new strategic focus of becoming a people centred and responsive organisation that will make full use of the available resources to attain our common vision. Though this is an ongoing process, we can say with pride that the tide has definitely turned.

Over the last twelve months we have abolished the old departments and replaced them with focussed strategic business units that will operate within integrating and coordinating Directorates. These business units will each focus on meeting the basic needs of our people while at the same time contributing to economic development and empowering our people to become active participants in development.

In our Integrated Development Plan we have also embraced a people centred approach that will enable us to build on the strengths and assets of our people to improve their opportunities to escape from poverty. This approach will sensitise our policies, programmes and projects to the possible impact they may have on households and to ensure that they serve to reduce vulnerability and strengthen our peoples livelihood strategies.

We have also been selected as a pilot Municipality to implement the National Treasury’s “Local Government Budget and Finance Reform Programme” The details of this programme are in your Budget Report. In short this program will assist us in bringing our financial planning, reporting and controls in line with international practise and the Municipal Finance Management Legislation currently being processed by National Parliament.

The immediate challenge of these reforms is that as from the 2003 - 2004 financial year we have to table a multi year budget that will be guided by our political priorities as captured in our IDP. In line with our theme of “putting people first” the budget also shifts attention from inputs to outcomes – from how much we have spent and how many projects to how may lives we have touched.

But while we introduce these changes we are also acting in an environment over which we have little control. Several developments at National and Provincial level have emerged that may pose serious challenges or open up new opportunities to better serve our people.

EDI Restructuring

The possible impact of EDI restructuring and the establishment of REDs is not yet fully understood. In this financial year we have to ring-fence all activities assets, personnel and finances that are associated with this function. We also have to look at the possible impact of the migration of this function on our other business processes.

The formalisation of our position as a Water Service Authority throughout our Municipality as from the 1st of July 2003 may pose many challenges in the short term but will also open up better opportunities to serve our people better.

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The implementation of projects in the previously neglected areas has also drawn our attention to serious deficiencies in the way we manage the work of consultants and the quality of the work that they do for us. This is an area, which, if neglected, may seriously affect our performance and undermine our service to our communities.

Mr. Speaker, allow me to summarise the salient features of our budget for 2003 – 2004. I shall also attempt to sketch for this house the advantages that we will derive from this new system of multi–year budgeting.

Section 153 of our constitution commands us to prioritise the basic needs of our people. Thus of the available Capital budget of R138 246 198 we have allocated 82% to the Key Performance Area – Basic Needs. To Local Economic Development we will be allocating 8% of which R5, 4m will be going towards the development of the African Market. 1% will be going towards the Empowerment of our communities, which is not a capital-intensive function. 9% of our capital budget will be going towards the Transformation of our Municipal Structure.

The composition of this funding is made up of R30 325 020 from roll over projects which are at various stages of implementation – R30 381 178 from external funding such as CMIP Human Settlement Redevelopment Programme which are mainly conditional grants and R77 540 000 which will be funded from our own funds.

Over the next 28 days we shall allocate these funds to the different clusters and to specific projects in these clusters. In our next Council meeting we shall table this report as our Budget Service Delivery Implementation Plan.

It should also be noted that certain projects whose implementation in the coming financial year is uncertain have been excluded from this budget.

These are:

Because some of these projects were included in our 2002 – 2003 budget their exclusion from the 2003 – 2004 budget has substantially reduced our total capital budget. Another factor to note is the rapid rise in the amount spent from R63 893 602 in 2001 – 2002 to R95 564 635, which is the estimate for 30 June 2003, this demonstrates our improving capacity to spend and to implement. In this year we will substantially increase this capacity and we hope to eradicate rollovers by June 2004.

Over the coming three years we shall spread our capital spending over the four clusters of Moletjie, Maja-Chuene Molepo, City-Seshego and Mankweng-Dikgale. How this will be done, will be determined by a number of factors such as population, growth area, economic activity, levels of poverty etc. Above all we shall specially prioritise those villages that do not have any access to essential services like clean potable water.

Mr. Speaker, as I have already pointed out we have reached out and changed the lives of our people in the previously neglected villages and townships. In this financial year we shall complete the Service Centre in Moletjie and start with the construction of new service centres in Maja-Chuene, Molepo cluster and Mankweng-Dikgale cluster. These Service Centres will enable us to reach out and change the lives of our people in these underdeveloped areas.

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In our quest to meet the basic needs of our people, in this financial year we shall also upgrade water, sanitation and roads in Mankweng Unit D to the value of R8 053 000. The funds for this purpose have been allocated to us from the Department of Local Government and Housing. We are tarring roads in Mankweng Unit A and we will be paving some areas to prevent erosion and to improve the aesthetics of the Central Business District.

The construction of a cluster sports centre in Mankweng will start with earnestness as we have allocated R1 000 000 for this year. This will be a multi year project.

We shall also continue with the implementation of water projects in Makanye, Badimong, Iraq and Matshela-pata to the value of R4 000 000.

We are proceeding to extend the infrastructure to deliver reliable and consistent water services in Moletjie Central and Bloodriver Makgofe. In Sebayeng and Dikgale we are drilling additional boreholes and extending our services to more households.

In the next 28 days we will announce our allocation of Capital projects in Maja, Chuene and Molepo. But in all these clusters we are stepping up our Gravel Road Management Programme in which we will encourage the use of labour intensive methods in order to create jobs for our people.

We are also continuing with our programme of upgrading soccer and netball grounds.

Mr. Speaker, over the last five months we have proved our capacity to deliver quality housing in Hospital View. In a period of three months we have completed 300 top quality RDP Houses and electrified them. We have also serviced 1077 stands in Doornkraal 9L and in this financial year we will be building 750 houses there.

We have been allocated 350 rural housing units of which 250 will be going to the Maja-Chuene cluster under the following villages:

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and 100 to Moletjie under the following villages:

We have also been appointed by the Department of Local Government and Housing to complete the 500 houses in Nobody Mothapo and 98 in Sebayeng. In this year alone we shall ensure that the lives of 1700 households are changed forever.

Surely Mr. Speaker we have turned the tide. We are building a better life for all.

When dealing with issues of poverty and economic growth we dare not ignore the issue of our environment and natural resources. Like the very water that give us life, we have to ensure that in whatever we do – we do not degrade our environment and leave it in ruins for the coming generations. In our IDP it is pointed out that waste poor management and lack of sanitation contribute enormously towards the contamination of ground water and the degradation of the environment. Random felling of trees for firewood and uncontrolled veld fires all affect our environment and biodiversity.

As part of our function to ensure sustainable communities and unspoilt environment it is our responsibility to ensure that we limit the amount of waste that ends up in our landfill site while also ensuring that it is managed properly. We shall therefore encourage the development of recycling activities throughout our Municipality. We are also considering forming a Public Private Partnership for the management of the landfill site.

To deal with veld fires we have to act in cooperation with farmers and the rural communities. This year we shall put aside R200 000 on our capital budget for the purchase of mobile veld fire fighting equipment.

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Operating Budget

In the financial year 2003 – 2004 our operating budget amounts to R525 433 575.

This being

This having taken into account

Mr. Speaker, these increases are all beyond our control. To balance our budget we shall have to effect the following tariff increases.

The average percentage increase will be 8%, which is well below inflation and even below the Reserve Banks inflation target of 9%.

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Mr. Speaker, Free Basic Services together with various other social welfare grants, old age pensions, disability grants, child support grants, food security programmes, free health care, free education and subsidised housing are all measures adopted by our government to reduce vulnerability and to mitigate the effects of extreme poverty.

But as the President Comrade Thabo Mbeki pointed out in his State of the Nation Address these are measures aimed at enabling those who fall within this category move out of the trap poverty within which they are caught,

“Accordingly, the government must act to ensure that we reduce the number of people dependant on social welfare, increasing the numbers that rely for their livelihood on normal participation in the economy. This is especially relevant to the accomplishment of the goal of enhancing the dignity of every South African”.

Basic services such as clean potable water, electricity, sanitation, are essential not only in reducing the vulnerability but also in enhancing the dignity of our people. As Polokwane Municipality we also intend to play our part.

In this financial year we shall abolish the indigent subsidy system that has been applied in the last four years to Seshego – City cluster. We will replace it with a comprehensive Free Basic Services Policy that will be applicable throughout our Municipality.

We have put aside an amount of R6 720 839 for this purpose. We shall also increase the amount of subsidy per qualifying household from R87.70 per month to R94.72.

Mr. Speaker, comrades and compatriots “Ditaba tša budget ga di fele.” In the next 28 days we will be allocating the capital budget according to cluster and projects. We hope to talk again end of June.

Thank You,

TL MAKUNYANE
EXECUTIVE MAYOR

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