By Thebe Mabanga
The City of Johannesburg (COJ) on Wednesday tabled its R89.4 billion Budget for the 2025/26 financial year, increasing capital expenditure to R8.7 billion by using part of its surplus.
Alongside infrastructure upgrades, the budget prioritises the upgrading of informal settlements and improved governance, with a strong focus on tracking service delivery performance.
“Today we do not merely present a budget. We present a vision forged in the fire of public participation, grounded in the demands of our people, and propelled by the spirit of renewal,” Joburg MMC for Finance, Margaret Arnold, told councilors and special guests.
“This is not a technical exercise. This is a political moment. And in this moment, we choose clarity over chaos, equity over excuses, delivery over delay.”
Arnold announced that the City’s operating revenue is projected at R84.8 billion, with operating expenditure at R80.7 billion.
This results in a projected surplus of R4.1 billion before tax and capital grants.
The capital budget, critical for infrastructure development, stands at R8.7 billion for 2025/26, with a total allocation of R26.2 billion over the next three years.
The total budget for the 2025/26 Financial year is R89.4 billion.
Key revenue drivers are electricity at R25.6 billion, with service charges increase of 12.41%; water and wastewater will bring in R 20 billion, underpinned by an average tariff increase capped at 13.9%, below Rand water increase of 15.3%.
The City expects to collect R18.1 billion from property rates, with a below inflation increase of 4.6% while refuse removal brings in R3.3 billion, an increase of 6.4%.
The National Fuel Levy, which is currently the subject of a contentious planned increase, will give the City R4.57 billion, an increase of 10.8%.
“This is a fully funded, pro-poor and pro-growth budget—an instrument of transformation, and a roadmap to resilience.” said Arnold.
She described the City’s tariff strategy as “balanced, progressive and transparent.”
“It is important to note that while the average tariff increases may seem high, primarily driven bypass through costs from Eskom and Rand Water, the increases are necessary to maintain the integrity of core services,” said Arnold.
The MMC of Finance announced that the prepaid electricity surcharge unchanged at R200, “a deliberate act to protect the poor against rising energy costs.”
This may not be enough to placate opposition parties such as Action SA, who have vowed not to support the budget if this is kept.
Arnold said employee-related costs remain the largest expenditure item, driven by 5.35% negotiated salary increase, followed by repairs and maintenance as well contracted services and professional fees, such as consultants, which have been limited in growth thereby “ensuring the City does not outsource its core responsibilities unnecessarily,” according to Arnold.
“The anticipated operating surplus of R4.1 billion is not for sitting idle in reserves. It is earmarked for strategic capital investment, debt servicing, and infrastructure refurbishment.” Arnold announced.
She noted that it will be increased by R4.1 billion in capital grants and contributions to improve solvency.
The Budget also contains what Arnold calls a robust Expanded Social Package (ESP).
“This is not charity. It is justice,” she said of measures designed mainly to cushion the poor.
Joburg’s residents will continue to receive the first 6 kilolitres of water for free, while qualifying residents receive up to 15 kilolitres of free water, 50 kilowatt hour (kWh) of free electricity, free sanitation, and refuse removal, “because in Johannesburg, we believe that basic services are a human right, not a privilege,” Arnold said, noting that pensioners “who built this city with their labour” receive up to 100% rates rebates on homes valued up to R2.5 million.
Indigent households, child-headed families, people living with disabilities, and the unemployed are supported through targeted rebates and subsidies on municipal services, housing, and transport.
“This is not a survival budget. It is a stabilisation and growth budget.” said Arnolds, noting that the budget reflects hard choices and trade-offs.
The budget allocates R4.6 billion to City Power over the next three years, for stabilising the grid to prevent collapse, strengthening of the network to improve efficiency to cope with growing demand, changing energy needs, and tightening revenue collection.
Johannesburg Water will receive the second largest capital allocation of R5.6 billion over three years to address both service backlogs and infrastructure failure hotspots, including R400 million City funding for major wastewater treatment works upgrades supported by R4 billion private partnership investment.
The Johannesburg Roads Agency (JRA) will use its R2.8 billion over the next three years to upgrade high-traffic corridors linking townships to economic centres and R400 million for expanding stormwater infrastructure in Orange Farm, Ivory Park, and Braamfischeville.
Arnolds announced that National Treasury has introduced the Metro Trading Services Reform Strategies as part of the second phase of Operation Vulindlela II.
“Through this reform the City is eligible to participate in an Incentive grant programme which promotes trading services turnaround, improves trading services operational performance, and increases trading services capital expenditure,” she said.
The services can include electricity, water and refuse removal. In this budget, the City accessed R24 million from this facility.
The MMC used the occasion to highlight the outcome of President Cyril Ramaphosa’s visit to the City which she said, “signals the dawn of a decisive new chapter defined by institutional alignment and strategic resource mobilisation” and led to the formation of a Presidential Working Group.
The Working Group will accelerate localised urban upgrades that directly address spatial inequalities entrenched by apartheid by directing investments to underserviced areas, align municipal service delivery standards and performance metrics with national development goals.
The Working Group will also unlock vital national grants for capital investment.
In this budget, the City received R2.3 billion for the Urban Settlement Development Grant.
Lastly, the Working Group will use climate finance to drive the expansion of green infrastructure.
This could include accessing funds from the Just Energy Transition Investment Programme, the $8,5 billion facility given to SA a few years ago at COP 26 in Glasgow.
“As we prepare to host key elements of the G20 and U20 Summits, this budget firmly positions Johannesburg as a continental launchpad—a place where Africa’s resilience, innovation, and potential will be on full display for the world,” Arnold stated, to one of several mild applause of a key event in November now expected to be attended by the United States President Donald Trump.
The Inner-City War Room, announced in the State of the City Address (SOCA) by executive mayor, Dada Morero, is now operational, Arnold said.
She said it brings together Development Planning, Johannesburg Metro Police Department (JMPD), Housing, and Public Safety into a single command unit focused on precinct-by-precinct transformation.
Arnold added: “Target areas include Hillbrow, Marshalltown, Berea, and parts of the old CBD.”
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