Cape Town Mayor Geordin Hill-Lewis has condemned a significant R540 million cut in national funding for Cape Town over the next two years. This is part of the budget cuts announced by Finance Minister Enoch Godongwana during the national Budget Speech.
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Cape Town will receive R353.28 million less in equitable share funding over the next two fiscal years compared to last year’s medium-term budget figures. This is part of a national reduction in Division of Revenue funding, which is distributed among all municipalities and provinces using a population-based formula.
National grant-funding cuts have been particularly severe for job creation grants, with Cape Town’s Expanded Public Works Programme (EPWP) funding reduced by nearly 60%, from R62.59 million in 2023/24 to R26.66 million in the upcoming fiscal year 2024/25. Over 83 000 EPWP job opportunities were created in Cape Town in the last two years, with the programme offering valuable training aligned with the skills gaps in the economy.
The City’s Presidential Employment Programme (PEP) funding allocation has also been reduced by R100 million, from R230 million now to R130 million in 2024/25. PEP funds a variety of job-creation initiatives, both locally and nationally.
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Cape Town will also receive R52 million less than anticipated in last year’s national budget for infrastructure grants for housing, basic services, and informal settlement upgrades over the next two fiscal years. The grants in question are the Urban Settlements Development Grant (USDG), Informal Settlements Upgrading Grant (ISUPG), and Neighbourhood Development Partnership Grant.
This comes after a R107 million cut to the USDG and ISUPG for the current fiscal year 2023/24, as confirmed in the Minister’s October 2023 Medium-Term Budget Policy Statement.
‘We in Cape Town strongly condemn national government’s decision to cut critical job creation and infrastructure funding,’ Hill-Lewis said. ‘This follows years of corruption, looting, and bailing out State-owned Enterprises.’
‘South Africans should not be fooled that these cuts were the only option: it is possible to make budget choices that are progressive, pro-poor and pro-growth, as we have shown in Cape Town. The National Cabinet had numerous opportunities to cut these costs from wasteful national government departments that serve no purpose, as well as the estimated R3 billion spent on VIP security.’
‘Instead, they have taken the easy way out by making anti-poor budget cuts to grant-funding and equitable share allocations to municipalities over the next three years. This will have far-reaching consequences across the country, and will make a deep impact on Cape Town’s pro-poor job creation and infrastructure programmes for basic services and housing.’
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‘We will continue to fight for the protection of critical grant funding, and for an increased equitable share for Cape Town. A growing population must come with increased national equitable share funding, especially now that the census confirms our city will soon overtake Jo’burg as South Africa’s biggest city with over five million residents,’ said Mayor Hill-Lewis.
Mayor Hill-Lewis stated that Cape Town had ensured that grant funds were spent for the intended purpose of housing and informal settlement upgrades, with 99% of the USDG spent or contractually committed over the last three fiscal years beginning in 2020/21. In 2022/23, the City also spent 100% of its grant funds from the ISUPG, a new grant aimed at improving informal settlements.
‘As with President Ramaphosa’s SONA, the National Budget includes no sign of funding towards devolving passenger rail to capable metros over the three-year budget, despite this being stated national policy. There was also no mention of the delayed National Rail Devolution Strategy.’
‘It is clear that the President and his Cabinet lack the political will to devolve rail despite the extremely urgent need to get trains running for the sake of our economy and households who need safe, affordable and reliable public transport.’
‘The City’s ongoing rail devolution feasibility study has found that lower income families in our city would save R932 million a year with working trains. Functional rail will also sustain over 51 000 jobs and add R11 billion to the local economy each year.’
‘Commuters cannot wait indefinitely for a clear deadline on handing over passenger rail in Cape Town. While we have made every effort to form a joint committee with national government to fast-track devolution, the President and his Cabinet have again failed to act with urgency, which will ultimately necessitate an intergovernmental dispute,’ said Mayor Hill-Lewis.
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Picture: Supplied / CoCT