MAKHADO (LOUIS TRICHARDT) – The approval of Council's record R217 878 000 operating budget for the 2004/5 financial year on Monday was met with wide-spread support.

The budget comprises an overall increase in rates and taxes of 5,25%, which stands in stark contrast to last year's budget shocker of an 11% across the board increase. The percentage increase of this year's budget is even less than that of the 2002/3 financial year of between 5,5% and 6,5% and is less than half of that of last year.

Although well-received, the percentage increase in growth of the 2004/5 operating budget of almost 16,5% is still far higher than the 7% guideline determined by the national Department of Finance for both the operating and capital budget. Among the reasons stated for the high percentage growth in the operating budget is the additional seconded personnel Council had to absorb. The reason for the high percentage growth in the capital budget is due to the almost R50 million Council received from the Vhembe District Municipality through the Municipal Infrastructure Grant. Another aspect of the operating budget, which again raises a few eyebrows of concern, is that Council's personnel estimates (salaries and councillor allowances) are still very high. The personnel estimates make up 34,18% of the total operating Budget. It is just over 2% lower than last year's 36,37%. A general acceptable accounting principle, however, is that the personnel estimates should not exceed 30% of an operating budget. It's a matter of balance

In his budget speech, mayor Rhulani Nkuzana said that the 2004/5 operating budget will attempt to balance their responsibilities of extending social services with the need to fight poverty, create job opportunities, provide skills through training, and building infrastructure through labour intensive methods. He said the budget puts much emphasis on the basic necessities of life, which are electricity, water and roads. Nkuzana said that Council have revised their Integrated Development Programme so that it must be consistent with the 2004/5 budget.

Capital Estimates

The capital estimates for the 2004/5 financial year amount to R77 253 700, while the capital charges for all projects amount to R16 858 725, which is a mere 7,74%. Compared to other municipalities, the Makhado Municipality has done well in keeping its capital charges to this level. The capital programme consist of projects to be funded through the Municipal Infrastructure Grant. This brought about an enormous growth in comparison with last years capital estimates of just over R20 million. The projects, amongst others, include some 20 water reticulation schemes in outside areas; the improvement of access roads to the Dzata Ruins and Aventura Mphephu, and the upgrading of several streets and roads in town and outside areas. The capital estimates also provide for several electrification projects. Other projects include the purchase of a refuse compactor.

Operational Budget

The operating budget for the 2004/5 financial year is roughly R31 million more than the 2003/4 financial year, bringing about an almost 16,5% increase. Again, the main contributing factor was the exorbitant salary bill. This year, the salary bill makes up 34,18% of the total budget, showing an almost 10% growth from last year. Should the operating budget also have grown with 10%, the salary bill would have made up almost 40% of the total budget.

As to how this increase will be financed, it is said that it would, amongst others, be retrieved from the increase in tariffs, as well as the charging of an R10 levy per month for all households in respect of all areas other than the town, the farms and R293 town. Council previously tried to raise funds via a similar process but in the end had to write off millions of rands in uncollected debts.

Increase in Tariffs

Electricity tariffs will be increased by 3,5%, while other services will be increased by 7%. The increase is in accordance with the guidelines of the National Electricity Regulator and the national Treasury Department. It is said that the increase is within the inflation rate and does not undermine government's macro-economic objectives or affect the residents of the municipality negatively. The municipality's assessment rates will be increased from 7,66 cents to 8,20 cents in the rand.

An expression of our dreams

In his conclusion, mayor Nkuszana said that the 2004/5 budget is an expression of the images of their dreams.

"Simultaneously, this budget seeks to discard the image of our nightmares. It has to be indicated that this budget is not sufficient compared to the challenges and the backlog of services which are still affecting our communities. Collectively and proudly, we can, however, say that our vision of a better life for our people is on track," mayor Rhulani said