February 28, 2021

Business Comments on Steve Tshwete Municipal Budget 2020/21

Several of the Middelburg Chamber of Commerce & Industry’s (MCCI) Executive members studied the municipal budget. They compared the budget line item by line item against the previous year’s budget, and MCC submitted their comments to the Municipal Manager. Briefly, their comments were: STLM was budgeting for an increase in profit (surplus) of 8.7%. Increase in service charges and rates of between 6% and 11.1%, which was significantly higher than the inflation rate of 5-6%.  Taking into account the ESKOM and NERSA electricity price hikes, a 28% mark-up on bulk purchases seems excessive and will put further strain on the manufacturing industry. Employee costs have risen by 6.8% and R40M, and councilor costs have remained constant but are still regarded as very high at a tremendous R24M of the operational expenditure. It should also be noted that there were “Other” or unallocated expenses planned of R26M. CAPEX contributes a further R465M in expenses over and above operating expense and a 6% expense on the current R7.6bn infrastructure. Although the CAPEX was allocated to various departments, the projects were not identified against which the CAPEX would be allocated. Many businesses could not operate during the Lockdown and sent letters requesting payment of Property Tax deferment for a period.  Tenants did not pay landlords, which in turn had to find funds to pay Property Taxes.  Several jobs in the Tourism Industry have already been lost.  We have requested during several meetings and discussions with STLM officials that they need to be aware that the business environment has changed drastically. The residents of STLM are used to our municipality earning rewards.  A well run and strong municipality is the bedrock of a strong local economy.

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