2006/07 Budget Speech by the Executive Mayor: Mr. Thabo Makunyane
Date:  22 June 2006

Madam Speaker
Our most Respected Traditional Leaders
Fellow Councillors
Invited Guests
Ladies and Gentlemen of the Media
Comrades and Compatriots
Honoured Guests

Madam Speaker, first I wish to welcome and to extend our warmest greetings to our traditional leaders who will be serving with us in this Council for the rest of our term of office.  Over this period we will benefit from their wisdom and the richness of their experience as part of the front liners in our common struggle against poverty and underdevelopment.

We also welcome the business people, the media corps, development activists and members of the community who have taken an interest in the transformation of our society.

Madam Speaker, Today we table before this house our first budget in the new term of office, we also table before this house an Integrated Development Plan that has been modified to reflect the realities of this new term of office.  The short time between the election and the deadline for the adoption of the IDP has not allowed us to do a comprehensive overhaul. In the new financial year we hope to revise the IDP to reflect our strategic priorities for the next five years.

Our former President, Nelson Mandela once described the broad commitment of government as:

        “to bring fundamental change to the lives of all South Africans, especially the poor; to recognise the actual contradictions in our society and to state them boldly, the better to search for their resolution; to avoid steps that further worsen social conflict and to build our new nation by continually and consciously exorcising the demon of tribalism, racism and religious intolerance.”

As we meet in this chamber today at the dawn of our new term of office it is important to take the opportunity to stand back, to look at the route we are taking in order to understand the broader impact of our work in the light of the critical question … “Are we bringing fundamental change in the lives of the poor?

Madam Speaker the last five years was a time of learning for all of us. We were pioneers of the new democratic dispensation in Local Government.  For the first time many previously marginalized and neglected areas of our country experienced democratic local government – for the first time these historically marginalized communities who had suffered so much under apartheid underdevelopment, look part in deciding their own destiny.

It was an historic leap into the new millennium.  Over the past five and half years the change was phenomenal.  In the area of Polokwane Municipality alone over R200m has been invested in water infrastructure, over 3700 low-income households in our licence area and over 11 000 in  the Eskom area have been connected to the Electricity grid.  Communities in Thokgwaneng, Ga-Magowa, Solomondale  and many others are receiving decent sanitation.

Over R125m has been invested in the improvement of road networks and stormwater systems.  Since 2003 we have managed to unblock seven housing projects and built over 1200 new homes in Sebayeng, Hospital View, Nobody Mothapo and Zone 1 extension. In 2005, we turned the first sod in the project that will accommodate 1000 households on its completion near Ladanna.  Throughout our Municipal area we have spared no effort to meet the need for sports and recreation facilities.  In the last few weeks we have also taken the first steps in the project that will see the complete upgrading of the Peter Mokaba Stadium to meet the FIFA World Cup Standards by 2010.

But Madam Speaker, infrastructure alone doth not development make. Development is about people, Our people have to be at the centre and in the driving seat of development. The efficacy of any investment in infrastructure has to be measured in the way it impacts on the lives of our people.

As we table this budget and Integrated Development Plan we stand at a critical moment in the history of our city. In the next four years we will be breaking onto the global arena in a way that few other cities in the world could ever hope to do. As one of the nominated cities to host the 2010 FIFA World Cup the eyes of the world will be on us.  Over the next four years millions of people throughout the world will be scrutinising every aspect of the City of Polokwane, from our history and culture to our infrastructure and our accommodation and recreation facilities. How will we stand up to this microscopic examination? This will be a unique and rare opportunity for Polokwane and our province to showcase our best assets and the diversity of our culture, and so open up new opportunities for our people throughout the province. This period could also expose to the world our most glaring weaknesses. The next few years could make or break the future of Polokwane.

But Madam Speaker, as Amilcar Cabral warns,  we should tell no lies nor claim easy victories. Amidst all the achievements, the opportunities and the victories we have scored over the last 12 years of Freedom, challenges still abound.

The essence of these challenges was sharply captured in a recent Presentation by Mr. Joel Netshitenje at the Mayors Conference in Cape Town.

        “ The advances made in the first Decade by far supercede the weaknesses.  Yet if all indicators were to continue along the same trajectory, especially in respect to the dynamic of economic inclusion and exclusion, we could soon reach a point where the negatives start to overwhelm the positives.  This could precipitate a vicious cycle of decline in all spheres.”

He goes on to point out that we require:

        “both focus and decisiveness on the part of government, the will to weigh trades offs and make choices, as well as strategies to inspire all of society to proceed along a new trail.  If decisive action is taken on a number of focussed areas, the confluence of possibilities is such that the country would enter a road of faster economic growth and job creation, faster and more efficient provision of quality services increased social cohesion and reduction of the paradigm of exclusion prevalent among sections of society”.

This is an acknowledgement on the part of Government that although we have succeeded in beginning to change the quality of our people’s lives for the better there are sections of our people who are still burdened with the legacy of apartheid underdevelopment, unemployment and poverty.

As the words of our Reconstruction and Development Programme say:

        “No political democracy can survive and flourish if the mass of our people remain in poverty, without land, without tangible prospects for a better life”

Decisive steps and focussed action are needed to deal with this central national challenge – the eradication of the terrible legacy of colonialism and apartheid that has condemned the masses of our country to the material life of misery and underdevelopment.

This persistent legacy still manifests itself in a number of ways which we encounter everywhere … unacceptable levels of unemployment and poverty, lack of productive skills, a ballooning second economy, lack of access to basic services and quality infrastructure.  Decisive action is needed.

In response the National Government has embarked on a programme to invest over R370bn rands in essential infrastructure that will accelerate economic growth, create economic opportunities and simultaneously afford access to basic services for the marginalized sections of our community.  This bold programme aptly named the Accelerated and Shared Growth Initiative of South Africa ( in short ASGISA) also aims to raise skills levels, to leverage private investment in specific growth sectors and also to facilitate the integration of people trapped in the second economy through the Expanded Public Works Programme, micro credit and the promotion of cooperatives.

50% of the envisaged investment over the current Medium Term Expenditure Framework will be implemented through the three spheres of government, including Local Government.

This immediately raises the question of the capacity of government – especially municipalities to implement programmes on this gargantuan scale.  Given the current skills shortage, persistent under expenditure and capacity gaps within Local Government thus the need to focus on the capacity of Local Government.

It is this perspective that has partly informed the formulation of our tasks for the next five years – the need to gear ourselves to harness the opportunities thrown up by the events of the coming years to accelerate economic growth, to provide sustainable quality infrastructure and services and to integrate marginalized sections of our community into the mainstream economy.  This is our new starting point.

Over the last few years, National Government has lived up to its promise to make resources available for investment in infrastructure especially in the previously neglected and underdeveloped areas.  Grants and subsidies from National Government has grown from R47,6m in 2002/03 to R143,5 in 2004/05 but there has also been a worrying and consistent pattern of under-spending which continued into the current financial year.

Madam Speaker, in this Age of Hope we need to recognise the actual contradictions in our society and to state them boldly so as to resolve them.  In the recent Strategic Planning Bosberaad the Mayoral Committee have identified some our own weaknesses which we are now poised to tackle decisively in order for us to tackle the tasks before us.  Some of these are:

a)      To align our own planning cycle with those of the National and Provincial Planning cycles – and to align our IDP more closely with PGDS and the National Spatial Development Perspective.

b)      To elaborate and strengthen the Monitoring and Evaluation functions.

c)      To develop clear Service Delivery Sector Plans in all our Strategic Business Units.

d)      To strengthen our ward Committee Systems and partnerships with key stakeholders. This would be reinforced with a continuous engagement with all our stakeholders and communities aimed at empowering them to participate meaningfully in our programmes.

These are just some of the areas, which we believe need urgent attention in the short to medium term.

In line with the findings of the National Assessment that was done on the performance of Local Government in the last 5 years, challenges in the following key performance areas also need specific attention:

i)        Institutional Capacity and Municipal Transformation

ii)        Basic Service Delivery and Infrastructure

iii)       Local Economic Development

iv)       Financial Viability and Management

v)       Good Governance

Madam Speaker

It is these priorities together with the inputs from our communities and stakeholders that have informed our review of the current Integrated Development Plan.  We have amended our Mission Statement in order to lay emphasis on the sustainability of our development initiatives.  Even as we plan these initiatives we should be thinking of their social, economic and environmental sustainability.

Our Four Key Performance Areas are still on track.  We still need to accelerate delivery of basic services in water, sanitation, roads and stormwater, electricity, waste management, sports and recreation etc.

We still need to strengthen our strategies to promote Local Economic Development.  We must continue to play our part to mobilise and empower our communities to take charge of the processes of development and social transformation and to achieve these we need to continually transform and capacitate our institution to function effectively and efficiently.

These four Key Performance Areas still remain the pillars of our Integrated Development Plan.  Our Budget priorities are also premised upon these KPAs.

Circular No. 27 of the National Treasury dated 18 November 2005 recommended that increases in tariffs and charges remain within the inflation band of between 3 and 6 per cent, consistent with the target of the inflation band. 

When determining the growth and tariff increase, the expected CPIX need to be taken into consideration.  The growth rate in term of the assessment rate is anticipated to be 2%.  As it takes time to develop the land, the other services growth rate is anticipated be 1%. 

Based on the above, the proposed tariff increases for 2006/2007 for Assessment Rates, Electricity Services, Water Services, Refuse Removal, Sanitation is 6% with effect from 1 July 2006.  Other services tariff increase also be at 6%. 

The total revenue is estimated to be R815 159 000.00 and the expenditure is also R815 159 000.00

The new Capital Budget amount to R211 090 245 and the projects rolled-over from the previous years amount to R164 073 483, resulting in the total capital budget amounting to R375 163 728 to be implemented during the 2006/2007 financial year. An allocation of R17m has been made for Free Basic Services and R5m for Free basic Electricity.

The total indigent subsidy will be increased by 6% to R112.43 from R106.07

I wish to thank all the officials and councillors who have contributed their efforts to make this Integrated Development Plan and the Budget a success. My special thanks go to the Chairperson of the Finance Portfolio Committee, the Chief Financial Officer, The PMU manager, the Director Planning and Development and the many councillors and members of the community who took time to participate in the community meetings that we called in all the clusters

By
The Executive Mayor
Mr. Thabo Makunyane

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