By Alicia Mmashakana
The Democratic Alliance in Maluti-a-Phofung has presented a simplified draft Adjustment Budget aimed at addressing the local municipality’s financial challenges and urging the political executive to adopt decisive action.
In a media statement on Thursday, DA councillor Alison Oates described the draft as a lifeline.
“We are proud to have crafted and published this alternative, to do everything we can to help rescue Maluti-a-Phofung’s finances,” said Oates.
For years, the municipality relied heavily on revenue from electricity sales to sustain its budgets.
However, Eskom now directly collects all electricity revenue, leaving the municipality dependent on an equitable share grant of R852 million from the national government, supplemented by income from rates, water sales, sewerage charges, and refuse removal.
Collection rates for these essential services are alarmingly low, ranging between 21% and 28%.
Additionally, the municipality faces a unique challenge as 21 wards in QwaQwa, governed under Tribal Authority, do not contribute to rates, exacerbating the financial strain.
“The DA’s proposed Adjustment Budget for MaP serves as a wake-up call for the political leadership to implement immediate and significant cost-saving measures,” said Oates.
“The DA emphasises that without decisive action to curb excessive spending and improve revenue collection, the municipality’s ability to provide basic services and fulfil its mandate will remain severely compromised.”
Earlier this year in April, the DA urged the community to reject the municipality’s 2024/25 draft Budget, criticizing its failure to tackle the acute financial crisis.
According to the party, the budget neglected urgent measures to boost revenue and cut costs.
“It is vitally important that the municipality increases revenue from electricity and water sales. However, the draft provides no plan to achieve this, nor does it address the urgent need for metering. Service delivery continues to decline, with no actionable reference to a municipal scorecard or its implementation,” the DA said at the time.
The party further highlighted systemic issues, noting the municipality’s inability to manage the R2 billion it oversees annually.
The biggest expenses are staff, payments to Eskom, and the Department of Water Affairs.
“Without decisive action to curb excessive spending and improve revenue collection, the municipality’s ability to deliver basic services and fulfil its mandate will remain severely compromised. The residents of Maluti-a-Phofung deserve better,” the DA said.
INSIDE METROS