STEVE TSHWETE LOCAL MUNICIPALITY BUDGET SPEECH 2006/2007 Financial Year By the Executive Mayor Councillor I.M.T. Mahlangu To the full sitting of Council Tuesday, 30 May 2006 17:15 Mr. Speaker, colleagues, distinguished guests, ladies and gentlemen, The draft 2006/2007 multi-year annual budget was tabled in Council at end March this year and was followed by extensive public participation and community consultation by meetings as required by the Municipal Finance Management Act (MFMA) and the Municipal Systems Act (MSA). It is also important to note that the budget was made available at all libraries, the offices of the Town Secretary and the Manager : Finance and on our website. Mr. Speaker, the public participation process undertaken was not only to comply with the legal requirements of the MFMA and MSA, but it also sought to give effect to the bold pledge made in the Freedom Charter that “the people shall govern and that all people shall be entitled to take part in the administration of the country”. As Steve Tshwete Municipality we have in the past, and will continue, to make sustained efforts in reaching out to our people and engage with them in a meaningful way on matters affecting their daily livelihoods as citizens of our municipality. In order to give substance to these consultations and to formally comply with legislation, I will later formally respond in this speech to give feedback on the submissions received during this process. Mr. Speaker, ladies and gentlemen, It is critical that we place this budget in its proper developmental and service delivery context and I want to quote from a viewpoint expressed by Minister Sydney Mufamadi when opening the National Forum on Municipal Finance held at the Emperors Palace last year: “Government takes the view that the basic tasks of development and democratic institution-building cannot be undertaken without a sound municipal fiscal base. We are also of the view that municipal finances play an important role in the daily lives of our people. Our ability to access such basic services as water, electricity, refuse removal and sanitation depends on the efficiency with which the finances of our municipalities are managed and the efficient way in which these and other resources are allocated”. PAST ACHIEVEMENTS The Council can proudly report to our citizenry that during the previous term of Council since demarcation of the municipality in 2001, the following outcomes were achieved: Community facilities - new library at Nasaret - new clinic at Hendrina - new fire station at Hendrina/Kwazamokuhle - refurbishment of Kwazamokuhle Community Hall - construction of 24-hour Service Centre - extension of cemeteries at Mhluzi - upgrading of the clinics in Mhluzi - expansion of Mhluzi Clinic - upgrading of the cloakroom at sport stadium Rural developments - water network at Doornkop where land restitution took place - township establishment at Doornkop - purchase of farm Bankfontein for establishment of rural village and township establishment is already 90% complete - purchase of farm Rockdale for township establishment which consist of 3062 stands Town planning projects - township establishment at Kwazamokuhle Extension 7 - aerial photography of the entire municipal area - floodline studies of streams in Middelburg and Mhluzi Creation of infrastructure - in total a distance of 35 kilometer new roads constructed at a cost of R23,5-million - a bridge built over the railway line in Oranje Street - water and toilets installed at 280 stands in Tokologo - water and toilets installed at 430 stands in Middelburg Extension 24 - total distance of 2,1 kilometer storm water channels installed in Newtown - 903 street lights installed in Mhluzi and Kwazamokuhle - 6057 new electricity house connections done - fifty high mast lights erected in Mhluzi, Kwazamokuhle, Extension 24 and Doornkop - new 10 mega liter reservoir constructed in Aerorand - the installation of services in Middelburg Extension 18 and Aerorand - continuous upgrading of storm water network in Mhluzi BUDGET PRIORITIES The budget that is before Council for consideration and approval today is focused on three key areas on the way to fiscal stability and economic vitality. These three key areas are: expanded economic development; improved quality of life and greater accountability and efficiency in the government of the municipality. Expanded Economic Development Mr. Speaker, turning to the economic outlook, ABSA Econo Trends mentions with regard to the present economic upswing: “South Africa is considered to be experiencing one of the best economic periods in many years. Lower inflation outcomes and interest rates are creating an economic environment for all time high consumer confidence. However, external factors such as the huge increase in the cost of oil will place upward pressure on inflation”. The local economy in Steve Tshwete benefited over the past year through property development in industrial, commercial and significantly in the residential sector. Residential development largely involved the erection of cluster units which is a reflection of confidence in investment on the one hand and a demand for housing accommodation on the other hand. The improved investment in industrial and commercial property can be attributed to the spin-offs of increased mining activity in and around the municipal area. This source has to be fully exploited to ensure most support service to the industry gets done locally. As main property developer Steve Tshwete ensures that prices are extremely competitive and market-related and development is encouraged through affordable incentives. Improved quality of life The Integrated Development Plan as approved in March was developed from consultative meetings with Steve Tshwete residents and government departments. The residents have told us of their concerns about affordable residential accommodation, the availability of potable water, electricity, basic sanitation and quality roads as well as the addressing of poverty, HIV and Aids. The political priorities for the national and provincial spheres of government also supported these concerns. Substantial information from the process as well as input from our citizenry exchanged paths and this had significant bearing on the final product being presented here today. Like all other public institutions, the problems of unlimited resources versus the ever increasing needs of society remain a challenge that always requires skillful consideration. However, the views of the community have manifested in a non-negotiable commitment to me, my committee and the administration to achieve the IDP priorities by way of: Expansion of basic services; Acceleration of delivery of water, electricity and sanitation to the poor; Extension of services to areas not presently serviced; Creation of jobs through expanded public works programmes; Ensure local capacity through administrative and financial management reforms; Proper maintenance of current infrastructure; Establishment of control measures to ensure organized settlements; and Strengthen law enforcement to ensure compliance to municipal by- laws. The municipality has strived to utilize all its financial and administrative capacity to achieve its mandates to deliver on these priorities. The dilemma of resources versus needs, however, requires viewing some aspects as multi-year issues, reviewable annually through a Medium Term Expenditure Framework (MTEF). This is therefore a multi-year budget. Accountability and Efficiency Mr. Speaker, I need to quote form the Premier’s State of the Province Address where he stated: “We are a nation with great goals. We may not reach them all this year. Maybe not even this decade. But we will eventually reach them. The lesson of our history – and the lesson of the last eleven years – is that great goals are reached step by step, always building on our progress. Always gaining ground as we build on the hope of our people. Of course, you cannot gain ground if you are standing still”. Mr. Speaker, the medium term budget for the next three years was prepared within the context of governments macro-economic and fiscal framework as well as the imperatives of the Development Strategy as contained in the Performance Management Monitoring and Evaluation System of the municipality. The inevitable tariff adjustments are proposed in a most considered way to determine the most acceptable and equitable funding regime taking into consideration the actual cost of delivering services, budget priorities, national legislation, regulations and policy guidelines. The Premier also made mention in the above-mentioned Address that last year findings of a skills audit among senior and middle management levels in municipalities was done and it will be followed this coming financial year by the rolling out of a comprehensive programme to build capacity of management. The Premier announced an executive development programme will soon be launched that will be compulsory for all senior managers in the province. Other elements include strengthening recruitment and selection, performance management as well as coaching and mentoring. This will assist in building an executive team as a province, and to ensure senior management to work from the same basic script. THE NATIONAL FISCUS Mr. Speaker, the honourable Minister of Finance, Mr. Trevor Manuel, in his Budget Speech for 2006, on 15 February 2006, made mention that “to budget is to choose” and “budgetary choices we make give life and meaning to the Age