BUDGET SPEECH DELIVERED BY THE EXECUTIVE MAYOR OF THE CITY OF JOHANNESBURG, COUNCILLOR AMOS MASONDO, METRO CENTRE, THE COUNCIL CHAMBER, BRAAMFONTEIN - JOHANNESBURG

Madam Speaker: Councillor Nkele Ntingane
Chief Whip of Council: Clr Bafana Sithole
MECs and Members of the Provincial Legislature
Mayors and Speakers
MMC for Finance and Economic Development: Councillor Parks Tau
Members of the Mayoral Committee
Fellow Councillors
Leaders of all Political Parties
Members of the Diplomatic Corps
City Manager: Mavela Dlamini
Managers and Officials of Council
Members of the Community
Distinguished Guests
The Media
Fellow Citizens

1. INTRODUCTION
Madam Speaker, as we are nearing the halfway mark of this current term of office, it is again an honour and a privilege for me to present this budget to Council. This year we are exceeding the R26 billion mark for the first time. This represents an increase of 13,5% over the 2007/2008 financial year figures.

Please allow me to state that this budget is a reflection of both the size and scope of the activities of democratic local governance in Johannesburg. It leaves no person in our City untouched. What is presented here and what Council will vote on will have a direct and measurable impact on the lives of our people.

The Budget is more than a mere balance sheet of revenue versus expenditure. It is more than an exercise to balance the books and to ensure that the correct amount of money is directed towards the correct department or programme.

Madame Speaker, in a City such as Johannesburg, with its huge developmental needs and continued disparities between affluent communities and those that are needy, we see the budget as a policy instrument through which we seek to transform our society.

It is for this reason that we have adopted, as the theme of the 2008/2009 Budget, "Deepening Democracy, Enhancing Good Governance and Building a Caring Society". This speech and the figures that we present today should be read and assessed in relation to the afore-mentioned.

At the outset, it should be noted, Madam Speaker, that this Budget comes at the tail end of a lengthy process of participation. This consultation was held with communities and stakeholders across the length and breadth of our City. We sought to reach out to every region and locality.

We did this through the prescribed IDP process, community meetings, ward committees, Mayoral visits and the stakeholder summit.

This budget is a people's budget.

In a recent article in the Swiss Political Science Review, political scientists Archon Fung and Joshua Cohen called for "a more deliberative democracy" and broader participation in public decision-making "because shifting the basis of political contestation from organised money to organised people is the most promising antidote to the influence conferred by wealth".

Fung and Cohen, have labelled this concept "Radical Democracy." They write, "Citizens can be the shock troops of democracy. Properly deployed their local knowledge, wisdom, commitment, authority, even rectitude, can address wicked failures of legitimacy, justice and effectiveness in representative and bureaucratic institutions."

2. CONTEXT
A recent report by the Bureau for Market Research (of UNISA), estimate that the total 2006 population for Johannesburg is 3,8 million, that more than 2,8 million were African and about 550 000 White. That during the period 2001 to 2006 the African population grew by about 20,4% and the total population by about 17,7%.

This report further notes that the bulk of the population in Johannesburg is between the ages 15 and 49.

It is important to note that of all the big cities in South Africa, Johannesburg has an average of 2,9 people per household.

Johannesburg has grown by more than 6% over the last two years, reaching 6,4% growth between 2006 and 2007. This growth has been driven by a range of sectors. Construction in particular, although a relatively small part of the economy, is growing at over 19% per annum.

It is important to state that the finance and business services are the largest contributors to the City's economic growth.

The percentage of people living in poverty was 25% in 2000; now it is down to 21%. Our Gini co-efficient – that measures disparities in wealth was 5,9 in 1996.

Madam Speaker, Over the last three years Johannesburg has experienced an unprecedented property boom, particularly on the northern edge, with prices in some areas escalating by as much as 300%. But unprecedented growth tends to outstrip and put an extra burden on the available infrastructure.

May I remind you that the many challenges that we are facing are not new, nor are they unique to Johannesburg. More than 2 400 years ago the famous Greek philosopher, Aristotle, said, "poverty is the mother of revolution and crime."

In dealing with issues of poverty and underdevelopment I am also inspired by the remarks of former President Nelson Mandela. When he accepted the Freedom of the City of London he said: "Like slavery and apartheid, poverty is not natural. It is man-made and it can be overcome and eradicated by the actions of human beings."

Over the past few days, we have witnessed unprecedented xenophobic attacks. In this City, the problem started in Alexandra Township and spilt over into Diepsloot and other areas. Within a matter of days, these attacks had become a serious matter of concern.

Whilst many of these attacks have been directed at foreign nationals, the violence has spilt over and led to attacks on South African nationals and business. Questions are beginning to arise as to the extent, which these attacks can be characterised as spontaneous occurrences. Increasingly, sinister motives are being ascribed to these incidents.

Madam Speaker, I believe that we should use this important platform to condemn the following:
· The violent attacks that we have seen in the past few days;
· The rampant criminality; and
· The malignant cancer of racism, xenophobia and ethnic violence.

We reiterate the view that migration and urbanisation are phenomena that affects large cities and metro areas across the world. Migration like urbanisation cannot be wished away or halted. All one can do is to ensure effective management.

The City has a policy on managing migration and seeks to ensure that all those who live within its jurisdiction abide by the country's laws and are treated fairly in keeping with the country's human rights guidelines. In addition, a Migrant's Desk was established in April 2007 to assist migrant communities, amongst others, to:

· Access essential services; and
· Information.

The City of Johannesburg, since this outbreak, has been decisively dealing with the issues. The following has been done:
· Johannesburg Metro Police Department has been working with national and provincial government on issues of security and policing;
· Emergency Management Services are on standby to provide assistance where necessary;
· City is providing tents, food, chemical toilets, water and health services for displaced persons and is working with other spheres of government and non-governmental organisations in providing humanitarian assistance and relief;
· We have deployed our councillors and officials to prevent attacks and deal with related problems; and
· We have been working with communities to ensure that all the issues are dealt with in a disciplined and responsible manner.

Madam Speaker, our expected response on this matter reminds me of a poem written by the Lutheran Pastor Martin Niemöller about the inactivity of German intellectuals following the Nazi rise to power and the purging of their chosen targets, group after group:

"They came first for the Communists,
and I didn't speak up because I wasn't a Communist.

Then they came for the Jews,
and I didn't speak up because I wasn't a Jew.


Then they came for the trade unionists,
and I didn't speak up because I wasn't a trade unionist.

Then they came for the Catholics,
and I didn't speak up because I was a Protestant.

Then they came for me,
and by that time no one was left to speak ."

Madam Speaker, we need to speak and act against those who are not committed and who seek to undermine our efforts to build an inclusive City. We need to speak and act against those who are against a South Africa that is non-racial, non-sexist, democratic and prosperous.

2.1. Mid-Term Report
Madam Speaker, on 1st March 2006, the people of Johannesburg elected this Council. It is important to recognise that September 2008 will mark two and half years, or the mid-point, of our electoral term of office.

We have a responsibility to answer these questions and to report on the following:

a) What ground have we covered regarding the implementation of the Growth and Development Strategy (GDS) as well as the Integrated Development Plan (IDP) – both of which were approved by this Council?
b) To what extent is this Council grappling with the challenges of poverty, unemployment and other ills that face our people?

Madam Speaker, we intend tabling a mid-term report in the near future to this Council on these related questions and matters.

2.2. 2008 Customer Satisfaction Survey
Madam Speaker, despite all the challenges and needs, citizens of Johannesburg remain positive or even upbeat about their City.

Over the past five years, the City has annually conducted a customer satisfaction survey to gauge satisfaction levels. This survey is important as it enables us to assess our performance and determine the extent to which the City is meeting the needs and expectations of its people.

Overall, the customer satisfaction survey seeks to measure satisfaction levels on six broad categories, namely:
· Basic services such as electricity, refuse collection, roads, sanitation, storm water, street lights and water provision;
· Community/collective services such as fire and ambulance and municipal bus services, public toilets, street sweeping and litter control and traffic lights;
· Public safety and by-law enforcement services;
· Billing, payment and enquiry services;
· Communication and interaction efficiency; and
· Corruption.

It is interesting to note that the top five issues raised have remained almost unchanged since 2004.

When asked to identify priorities for the 2008, both households and businesses indicated that unemployment, crime and HIV/AIDS were the top three challenges that require dedicated effort and attention from government.

These issues already form part of the six Mayoral strategic priorities for the City namely:
· Economic growth and job creation;
· Health and community development;
· Housing and services;
· Safe, clean and green city;
· Well-governed and managed city; and
· HIV and Aids.

The results of the survey, in general, indicate that both business and households attribute a very high rating for refuse collection, sanitation and water provision services. All other basic services, for example, roads, storm water and streetlights were given a moderate satisfaction score by households and business.

The biggest area of dissatisfaction is electricity. This was expected because of the load-shedding regime introduced by Eskom from the beginning of this year.

With regards to community services, it is clear that our residents perceive the services supplied by the City to range between adequate and very good. The residents of Johannesburg did not rate any of the community services as poor. Particularly high satisfaction ratings were recorded for recreation centres, municipal bus services, municipal museums, municipal theatres, the Johannesburg Zoo, municipal cemeteries and public libraries.

In line with the priorities identified earlier by households, government-provided housing and municipal clinics were some services rated lower, but not poor.

As indicated earlier, crime has been identified by both households and business as a major challenge and priority. The residents were asked for their perceptions on how safe it is to live in Johannesburg, safety after dark, and safety of neighbourhoods and safety in the Inner City.

An equal number of residents perceived their living in Johannesburg as safe as those that describe it as dangerous and unsafe. Every 4 out of 10 residents feel that Johannesburg is a dangerous place after dark. Thirty four percent of respondents perceived their neighbourhoods as being safe and very safe.

Residents rated the Inner City as particularly unsafe, with only 1 in 10 rating this area as safe and very safe.

Madam Speaker, it is worth noting that our by-law enforcement services all received a good or satisfactory rating. Building control and land invasions received a rating of above 7 out of 10. The residents also returned a good score for our traffic control services.

It is also gratifying to see that our efforts over recent years to reorganise our billing system appears to be bearing some fruit. Residents and business provide a fairly high satisfaction rating regarding the clarity and correctness of the City of Johannesburg accounts. The satisfaction rating regarding the attitude of staff at payment points is also rated good to very good. Business rating of our billing and payment services is even higher than that of households.

This is a brief sample of a very comprehensive report that we will be tabling at this Council not later than the end of July 2008. This will enable councillors and the public to study and engage on its contents.

2.3. Constitutional & High Court Judgments
Madam Speaker, over the last few months we have received court judgements relating to the City's efforts to ensure and improve service delivery and development. Please allow me to refer briefly to these and indicate the City's responses.

Firstly, on 19 February 2008, the Constitutional Court handed down judgement in the matter of Occupiers of 51 Olivia Road Berea Township vs. the City of Johannesburg, what is often referred to as the San Jose case. Some interpreted the outcome of this case as going against the City and its plans on urban renewal.

We do not read the judgement this way. We must remember that the substantial issue of the eviction was taken off the table before the judgement was given. Following instructions from the Constitutional Court we reached an agreement with the occupiers back in November 2007 on a process of voluntary movement of people out of the bad buildings in question and into temporary accommodation that we would provide. This temporary accommodation was already promised before the Supreme Court of Appeal in early 2007.

On most of the issues that remained for the Constitutional Court to decide, the case did not go against the City. The Court forcefully reminded the City of its obligations to engage with people in bad buildings, but it did not say that the City must provide alternative accommodation within the Inner City in each and every case. Perhaps most importantly, the Court refused the applicants' request to declare that our Housing Plans were unconstitutional, and to issue a structural interdict against the City.

Following the judgement, our Inner City Housing Plans continue to accelerate in line with what we said to both the Appeal Court and the Constitutional Court. We are likely to have spent about R100 million on temporary accommodation and provide over 2000 beds by the end of the financial year 2008/2009.

Secondly, on the 30th April 2008, Judge MP Tsoka in the High Court of South Africa ruled, amongst other things, that:
· The City of Johannesburg's implementation of a pre-payment water system in Phiri in Soweto was unconstitutional and unlawful, and that the City must give households the option of a credit meter; and
· Limiting free basic water to 6kl per household per month (25 litres per person per day on the assumption of 8 people per household) was reviewable, and that the City of Johannesburg must give each person 50 litres of free water per person per day.

The City respects the judgment that has been handed down.

Immediately on receiving the judgment we moved to halt our programme of rolling out pre-payment meters, until we could consider our legal position. However, after close consultation with our legal counsel, we believe that there is sufficient basis to believe that a different court will reach a different conclusion, and so we are appealing the decision. Briefly our view is that:

· Pre-payment meters need to be understood side-by-side with our subsidised package of free basic service, what is called our social package. This social package started with 6kl of free basic water, but we have expanded this to 10kl of free basic water for the poor. We have also provided 4kl of water for emergencies for any household on a pre-payment meter. And we have enabled a representation system so that anyone with further requirements for free water can approach the City.

Our social package continues to expand and be refined. Last week we approved a major new poverty-targeting system that will be able to consider much more of residents' individual circumstances in managing the flow of free basic services, with different levels of assistance for different levels of need.

The progressive realisation of the right of access to water does not mean we pay no attention to other critical issues, in particular water conservation. The recent electricity supply crisis has made us more conscious of other possible constraints in the supply of resources essential to the economic and social well being of our City.

All the evidence points towards a point, sometime around 2014, that if the scarcity and demand for water is not properly addressed, water in Gauteng will exceed the available supply. This is years before any new supply capacity, from new dam construction by Department of Water Affairs and Forestry, comes on stream. So water demand management is a critical issue that we must confront immediately.

Operation Gcin'amanzi, which involved fixing dilapidated water infrastructure, a once off rehabilitation of households' water and sanitation infrastructure on their stands, and the installation of pre-payment meters to help households understand and manage their consumption, has been one of our primary responses. We have already been exploring, before the recent judgement, the rolling out of pre-payment meters to the rest of the city.

Our response to the critical matter of water conservation in face of a looming crisis cannot be understood as anti-poor. When coupled with an expanding social package there is no reason why pre-payment meters cannot work to ensure stable, sustainable and affordable access to water to all our residents. We do not think our approach has been unreasonable and we are confident that our position will be vindicated as the legal process unfolds.

3. IDP & BUDGET
Madam Speaker, the Integrated Development Plan (IDP) is the City's 5-year plan that guides development and service delivery. The IDP, on the one hand, is based on the needs of the community and the City's stakeholders. The needs are determined through extensive public participation programmes.

On the other hand, the IDP responds to the challenges of economic growth, infrastructure, and poverty at the citywide level. Therefore, the IDP represents a convergence of bottom-up needs of its citizens and the imperatives of socio-economic development.

The essence of the IDP is its sector plans, which outline 5-year strategic objectives, key performance indicators and targets, IDP programmes and the delivery agenda for the year ahead. The IDP also provides an overview of intergovernmental alignment, summarises the Spatial Development Framework and the Capital Investment Framework and outlines the Performance Management System.

In May 2006, the City approved its 5-year IDP for the 2006/2011 electoral term. The Municipal Systems Act requires a municipality to review its IDP annually, taking into account an assessment of its performance as well as change in priorities and external circumstances. The IDP being presented for approval now is the 2008/2009 IDP, which represents the second revision of the 5-year IDP.

The following key milestones were achieved in the review of the 2008/2009 IDP and Budget:
· The Budget Lekgotla 1 in November 2007 finalised the 2008/2009 Delivery Agenda and identified key IDP interventions;
· The Provincial Sector Workshop in November 2007 identified areas of cooperation between provincial departments and City departments;
· The Budget Panel in January 2008 discussed business cases for key IDP interventions;
· Budget Lekgotla 2 in February 2008 finalised proposals for the IDP, tariffs and the Budget; and
· The 2008/2009 Draft IDP and Budget were tabled at Council on 20 March 2008 for public comment and submitted to Section 79 Portfolio Committees for comment.

Madam Speaker, while the City has a legal and constitutional obligation to public participation, it is also deeply committed to ensuring that its planning and budget allocation processes takes into account the views and the needs of communities and stakeholders.

In the process of compiling this budget we met with residents and stakeholders from different regions and sectors.

Please allow me to highlight some of the comments that were raised at these meetings:

3.1. Key IDP Interventions
Madam Speaker, the City of Johannesburg has identified a number of Key IDP Interventions. These represent the flagship programmes and initiatives that will accelerate the achievement of the principles contained in our Growth and Development Strategy (GDS), namely:
· Proactive absorption of the poor;
· Settlement restructuring;
· Balanced and shared growth;
· Social mobility and reduced inequality;
· Sustainability and environmental justice; and
· Innovative governance solutions.

Please allow me to highlight some of these interventions:
· HIV and Aids Support Programmes;
· Revised Social Package;
· Growth Management Strategy;
· Formalisation of Informal Settlements;
· Provision of Basic Services;
· Rea Vaya Bus Rapid Transit (BRT) System;
· Housing Delivery;
· Inner City Upgrading and Regeneration through the Inner City Charter;
· 9% Economic Growth;
· Energy, Water and Waste Demand-Side Management;
· Greening of the City;
· Targeted Crime Prevention and Safety Initiatives; and
· 2010 FIFA World Cup Facilities, Compliance Requirements, Fan Experience and Legacy Projects.

These interventions are further elaborated on under the section that deals with the Medium Term Budget.

4. HIGH LEVEL OVERVIEW OF THE 2008/2009 BUDGET
Madam Speaker, the Budget is delivered in a period of tight financial conditions and global uncertainties. It is also presented against the background of developing changes within the City's revenue landscape such as the introduction of the new Municipal Property Rates Act and the new valuation roll, the proposed electricity increases from Eskom and the rising rate of inflation.

This Budget also reflects the City's unequivocal commitment to the principles of financial responsibility and integrity.

The 2008/2009 budget presents an expenditure plan of R26 billion, which represents an increase of 13,5% over last year's figures.

Of this amount R5,2 billion goes towards funding capital infrastructure and R21 billion towards the operating budget.

4.1. Economic Landscape
This Medium Term Budget should be evaluated against the backdrop of challenging global economic developments. Worldwide the economic climate and outlook has deteriorated, mainly due to uncertainty and volatility in global markets – especially on the financial and oil markets inflationary pressures.

High global oil and food prices continue to put an upward pressure on global inflation, with many central banks missing their inflation targets. This has presented a challenge to monetary policy makers in most parts of the world.

Here at home, the South African macro-economic environment has not escaped these significant challenges. The current inflation scenario is a matter of concern, and has an impact on the short to medium-term outlook. In April last year the South African Reserve Bank's inflation target range of 3% to 6% was breached for the first time in 43 months, when CPIX reached a 6,3% year on year increase. The Bank now expects CPIX to peak during the first quarter of 2008 at an average of 9,3%, before starting to decline and only returning to within the target range by the fourth quarter of 2009.

4.2. Impact Of High Inflation And Interest Rates
The high interest rate scenario makes borrowing expensive, and since one of the sources of the City's capital spending is borrowing, it could compromise capital spending to the required scale. This could, eventually also translate into higher tariffs for the City's services, thus compromising affordability, and exacerbating the pressure exerted on consumers by the high oil and food prices.

It should be noted that the proposed tariffs for the City of Johannesburg were based on the CPIX of 6,2% in line with National Treasury guidelines. The latest trend on CPIX projects an average of 8% for the 2008/2009 financial year. Adjusting the tariffs to this rate might mean that the City will experience difficulties in collecting revenue at expected levels and bad debts might increase.

For a City such as Johannesburg one of our major challenges is to manage the trade offs between the financial sustainability of the organisation and the affordability of services.

The City has taken a decision not to revise upwards the estimated inflation link to the tariffs.

4.3. Implementation of the Municipal Property Rates Act
Madam Speaker, property rates are an important source of revenue for the City and help us to achieve the developmental mandate set out in the Constitution. The implementation of the new property rates policy in Johannesburg supported by a new valuation roll has reached an advanced stage. We remain committed to start implementing the provisions of the Municipal Property Rates Act of 2004 by 1 July 2008, exactly a year ahead of the deadlines set by the legislation.

The final Rates Policy together with its by-laws was considered by this Council at its meeting on the 24 April 2008. The new system represents significant changes to the way in which the City collects rates and taxes. The main features of the new system are:

· A change in the valuation basis, from site values to full market values;
· A new valuation roll, the first since 2001, taking into account the growth in the property market; and
· A new property rates policy, requiring significant reconsideration of property tax.

The provisional general valuation roll was completed in December 2007 and handed over to the City Manager at the end of January. The new roll contains the market value of all properties in Johannesburg according to Section 46 of the Act. It also lists the market value of sectional title properties individually, as required in Section 47 while Public Service Infrastructure is listed in the roll according to Section 8(2).

The provisional general valuation roll contains 784 324 entries, of which 156 499 are individual sectional title units.

The total market value of properties listed on the roll is R708,4 billion as at 1 July 2007. This represents a dramatic increase on the total rates base of the 2001 general valuation roll. The main reason for this significant increase is the fact that the combined market value – including both land and improvements was determined, versus the land value only in 2001. The inclusion of individual sectional title properties also contributes to this growth.

The City thus proposes that the tariff for residential properties be 0,4 cents in the rand. Less than ½ cent for the value of each rand in the property value. In addition the City proposed a R150 000 value exclusion from all residential property, aimed at introducing a fair and equitable system of rating but also address those property owners that cannot afford to pay.

However, the City is introducing a minimum charge that would be payable by all property owners, even if their properties are valued at less that R150 000. This minimal amount of R60 per annum will ensure that all property owners that make use of the services that the City has to offer can hold government accountable.

There are also various rebates that are offered to assist those who have limited means to pay such as pensioners and Public Benefit Organisations.

This City undertook an extensive public awareness campaign to inform ratepayers and other stakeholders of the newly proposed roll and rates system. Ratepayers have also been given ample opportunity to comment on the new system and to make formal representations.

Madam Speaker, I think it is important that we again emphasise the following key principles that will guide us during the implementation of the new system:

· That the City will adopt the principle of "revenue neutral", meaning that no major loss or surplus will be gained through the implementation of the Act to the total budget of Council;
· That the City will ensure equity and fairness to all categories of property; and
· That the City will endeavour to find mechanisms to mitigate against huge increases on the individual property owner, as a result of the implementation of the Act.

The City of Johannesburg is committed to implementing the Municipal Property Rates Act, of 2004 in a fair and equitable manner, with minimal impact to the City's budget and its ratepayers. We want to thank the residents and citizens as well the businesses community for their responses and participation in the public processes and trust that this constructive approach will continue to characterise the implementation in the coming months.

4.4. Tariffs
The current tariff review is done within the environment of an increasing demand on limited and fast depleting resources: The following are key elements of this environment:

· The current national electricity supply constraints;
· A projected shortage of water resources within the next two decades;
· Depleting landfill air space;
· The need to respond pro-actively to climate change initiatives to minimise the impact of global warming;
· Our commitment to make basic services affordable to the indigent;
· A need to change user consumption behaviours to ensure resource conservation;
· Additional infrastructure that is required due to the rapid growth of the City;
· The upgrading and replacement of infrastructure that is old and requires huge investments; and
· The pass through cost that the City receives from Eskom and Kelvin power station.

The City has introduced stepped tariffs on different consumption levels as part of demand side management. This means the more you consume the more you pay. This is done with the view of encouraging residents to change their consumption patterns, which will result in the culture of saving.

4.5. Tariffs - Responding to the Poor
Through the approved tariff, the City has provided for residents who are poor, pensioners and those cannot afford to pay. Every resident who finds himself/herself in this situation is required to apply so that he or she can be considered.

For the 2008/2009 financial year the following relief will be provided:
· Indigent households get 100% rebate on assessment rates;
· Free 10kl of free basic water per month;
· 100kW of electricity per month;
· Pensioner who is 60 years old and owns a property to the value less than R1,5 million and whose gross monthly household income is lower than R5 000 gets 100% rebate; and
· Pensioner who is 60 years old and owns a property to the value less than R1,5 million and whose gross monthly household income is higher than R5 000 but lower than R9 000 get a 50% rebate.

Please refer to the budget documents as well as a special booklet on tariffs for relevant details.

5. MEDIUM TERM OPERATING AND CAPITAL BUDGET FOR 2008/2009
5.1. Revenue
Madam Speaker, the total Operating Revenue Budget is estimated at approximately R21 billion. Revenue derived from electricity is estimated at R4,9 billion or 23%, from water and sewerage at R3,7 billion or 18%, property rates will contribute at R3,8 billion or 18%, refuse removal at 2% and fines and license fees 2%. Operating and Capital grants account for 27% of the total revenue; while the balance of income is derived from various fees and charges.

5.2. Allocation Per Department
The Core Administration accounts for approximately 42,5% of the total operating budget and this is how the budget is shared amongst the departments:

· Community Development receives R553,4 million;
· About R115 million will go to Transportation;
· Housing is allocated an amount of R685 million (8,6%);
· Finance accounts for 21%, including bad debts and debt servicing cost;
· Metro Police will receive R1,2 billion;
· R472 million goes towards Emergency Services;
· Corporate Services is allocated R413 million;
· Health will receive R357 million of the Budget;
· Development Planning and Urban Management's share is a total of R463 million; and
· Economic Development gets R143 million, and the balance is shared amongst other functions.

Municipal Entities account for approximately 57,5% of the total Budget, and this is how the operating Budget is divided:

· Water will receive an amount of R3,7 billion;
· About R5 billion will go to City Power;
· Roads' budget is just under half a billion rand at R496 million;
· Pikitup accounts for R1,1 billion;
· Metro bus is allocated R402 million; and
· Fresh Produce Market will receive R159 million.

5.3. Key Features Of The Budget
Madam Speaker, please allow me to refer to key features of the budget with specific reference to the key IDP interventions:

5.3.1 Formalisation of informal settlement
Madam Speaker, the City is committed to upgrading all informal settlements in Johannesburg. This is in line with the national target of formalising all settlements throughout the country by 2014.

The current reality in Johannesburg is that there are 182 informal settlements accommodating 180 000 households in informal structures. Residents of informal settlements live in a state of legal insecurity and have little incentive to invest their own resources in the physical environment. As a result, homes in informal settlements are often unsafe, unhealthy and generally provide inadequate living environments.

The intention of this initiative is to introduce a level of legal security for residents and include informal areas in an appropriate regulatory environment. This will encourage and protect property investments that are made by residents. Even simple, affordable improvements like water- and weather-proofing and food gardening can have significant health benefits.

Provision has been made for this initiative through City funding and the Neighbourhood Development Partnership Grant.

5.3.2. Inner City and Urban Renewal Programmes
The City has committed an amount of R2 billion over a five-year period towards Inner City Regeneration. In the current budget we are allocating R250 million from the operating budget and an additional R200 million for capital expenditure.

Priorities for the coming year include a comprehensive process of inspection and a survey of all properties and open spaces. This will also enable us to respond promptly to daily service breakdowns and strengthen our law enforcement and crime prevention efforts.

To ensure the long-term sustainability of programmes we will continue with an intensive process of stakeholder engagement and liaison and apply quality assurance techniques to measure the impact of our interventions.

5.3.3. Targeted Crime Prevention and Safety Initiatives
A significant portion of our budget is being allocated to crime prevention and the strengthening of public safety measures. Our intention is to appoint a thousand (1 000) new Metro Police Officers in the coming financial year.

Our objective is to see an annual reduction of incidents of crime in the City of between 7 and 10 percent. An amount of R576 million is allocated for the crime prevention programme.

This will be spent mostly on increased visible policing, surveillance technology, a special focus on social crime cases and Community safety awareness campaigns

We have set ourselves a target to reduce road fatalities and improve compliance to road traffic laws by 15%. This programme will receive R494 million and will be allocated in the main towards campaigns to reduce the number of unroadworthy vehicles from our roads, to facilitate the free flow of traffic and conduct traffic safety awareness campaigns.

Part of our efforts to ensure our state of readiness of 2010 includes the allocation of more resources for emergency services. 150 fire fighters will be appointed during the 2008/2009 financial year and 25 new ambulances will be in service from November 2008.

The Emergency Response Improvement Programme receives R355 million to ensure efficient and effective response to emergency incidents and an amount of R30 million is allocated towards Disaster Management. The recent natural disasters in China and Myanmar have again emphasised the importance that cities of the size of Johannesburg keep its emergency response systems at a 100% state of readiness.

5.3.4. Growth Management Strategy
Sustainable growth of the City is dependent on the alignment of economic growth with available infrastructure. The current misalignment has caused distortions and anomalies illustrated by areas of high growth, failing infrastructure, and other areas with low or no growth. If growth in the city is not addressed in a comprehensive, sequenced and phased fashion, ad hoc investment by the City's service providers and the development sector will continue to undermine the City's spatial form.

The Growth Management Strategy (GMS) will establish a shared understanding of the type of economic growth that is desirable and the current status of infrastructure. This will be used as the basis for policy and financial decision-making. The strategy is focused on a strong link between infrastructure availability and spatial planning. It also focuses on the protection of environmental resources and open spaces. Importantly it ensures that further development is linked to and guided by the availability of infrastructure.

5.3.5. Transportation and Bus Rapid Transit
Madam Speaker, the Budget for Transportation will increase by 31,7% in the coming year. Of the R981 million allocated R332 million will go towards Intelligent Transit Systems and R419 million to take the Rea Vaya Bus Rapid Transit System forward.

In line with the approved Integrated Transport Plan, the City will develop dedicated bus-ways and station and interchange infrastructure along the Strategic Public Transport Network corridors in phases. Traffic signal infrastructure and a telecommunication backbone will be developed along the Rea Vaya routes to give signal priority to public transport vehicles. The Transportation Department will also develop and upgrade public transport lay-bys and shelters throughout the city, and implement a sustainable development application process to prioritise high-density and mixed-use developments along Rea Vaya routes.

The BRT business model allows the incumbent taxi bus operators on the Phase 1 routes to become the BRT operators. New joint-venture bus companies will be contracted to supply and operate BRT buses with payment on the basis of bus-kilometres run.

5.3.6. 2010 FIFA World Cup
Our preparations for 2010 remain on track, on schedule and within budget. A number of local and international inspection teams, observers and media representatives have visited our construction and development programmes in recent weeks and have expressed satisfaction and appreciation for the progress we have made.

It cannot be denied that there is a buzz and a sense of excitement in the air in the knowledge that we are a mere 25 months away from this spectacle. The money allocated in the budget also takes us right up to the first whistle of the World Cup.

R789,1 million has been provided over the next two financial years for 2010 of which R580 million will go towards the completion of Soccer City, R130 million for the work done at Ellis Park, and R82 million for one of our primary legacy projects, the greening of Klipspruit and its wetland system.

Community Development has been allocated R194 million to ensure the completion of the stadiums that will serve as training venues for the tournament namely Orlando, Dobsonville, Rand Stadium and Ruimsig.

5.3.6.1. International Broadcasting Centre
FIFA, the Local Organising Committee and the National Government have decided, after examining all the bids, that the International Broadcasting Centre will also be located in Johannesburg.

The importance of the World Cup as a media event can hardly be exaggerated. Claims about the number of viewers differ from one analyst to another. But according to FIFA's own figures, for the duration of the tournament, the 2006 World Cup tournament held in Germany, attracted a cumulative audience of 26,29 billion viewers. The final match between Italy and France was seen by 715 million people. Research done by the London-based media agency Sponsorship Intelligence, showed a rise of 15 percent in TV audiences from 2002 to 2006.

In Germany there was in excess of 13 400 accredited TV commentators, camera crews – members and technical staff. We expect that a similar figure will use this centre as their headquarters and that many of them will reside in the accommodation that is going to be built here. The IBC is expected to operate around the clock, 24 hours a day for six weeks, in the period preceding and during the event in June and July 2010.

When this City presented its bid for the IBC, the question a of lasting legacy was paramount in our minds. We believe that the IBC will contribute to the telecommunication and broadcasting infrastructure, which will improve the lives of all our people.

For this City, the construction of the IBC and the redevelopment of Soccer City provide an additional thrust to our long-term plans to revitalise the south of Johannesburg.

In 2001 the City of Johannesburg approved the Nasrec Precinct as a development node to bridge the apartheid spatial planning gap between the South and the North of Johannesburg. This has resulted in amongst others, in the private sector partnering with the City in investing R 1 billion in the Nasrec Precinct for the development of 500 residential units and a four star hotel.

In order to host the IBC, the City will make an investment of R120 million. The main expenditure will be to rent and upgrade the required halls and facilities from the Expo Centre.

The City is investing in infrastructure upgrades ahead of developing a mixed-use precinct that will include one of the City's biggest transport hubs and commercial, retail and residential developments. The anchor facilities – the Expo Centre, Soccer City and the Crown Mines golf course – are being significantly upgraded as part of the project.

The Expo Centre itself will undergo a substantial face-lift, transforming it into a more attractive and modern exhibition, convention and an event venue able to attract more and larger events and activities.

Once completed Nasrec will be one of the most accessible precincts in the country providing economic opportunities for the surrounding communities and the general public.

5.3.7. 9% Economic Growth
Madam Speaker, the budget framework makes provision for programmes that will enable us to reach our target of 9% growth.

The projects include the following:
· Acceleration of Soweto Empowerment Zone;
· Expanded Public Works Programme;
· Better Buildings programme;
· SMME Fund; and
· Broadband Access.

5.3.8. Greening and Environment
The City's intention to plant 200 000 new trees by 2010 has captured the imagination of both residents and environmental experts. The greening of our City particularly the South is part of a long term vision to create an urban environment that is not only conducive to investment and economic opportunities but also to ensure that this development takes place in a sustainable environment.

The latest figures show that almost 36 000 new trees have already been planted and a further 50 000 will be planted in the coming financial year. 80 000 trees will follow in the 2009/2010 period with the remaining 34 000 to be planted in the last quarter of 2010. An amount of R15 million has been earmarked for the planting and watering of trees in this budget.

5.3.9. HIV and Aids Support Programmes
Once again the budget reflects our commitment to provide quality health services to our communities in collaboration with the other spheres of government. The City will be investing approximately R45 million towards HIV and AIDS prevention programme.

On HIV and Aids we are involved in a number of programmers and outreach campaigns including the Jozi Ihlomile projects that have been implemented in 12 areas across the City. It is supported by 300 community members who are paid a nominal allowance. The project has been extended to four new areas namely Ivory Park, Bramfischerville, Slovoville and Drieziek with the involvement of 84 volunteers from the community.

In the coming years we will focus on extended prevention campaigns and comprehensive and integrated treatment programme that will specifically target city employees. It will also include outreach programmes to improve home-based care and look after the interests of vulnerable children.

A provision of R5 million has been made for the construction of a clinic at Lawley. This project will provide a comprehensive HIV and AIDS programme at the clinic, including anti-retroviral services to this area of high need. It will also provide a base for outreach programmes into the community, and for providing support to home-based care programmes.

5.3.10. Expanded Social Package
The Expanded Social Package enhances and expands the core logic of the existing special cases policy for municipal service subsidies (more generally known as the indigent or social package policy). Moreover, it combines it with a single-window approach to social assistance delivery and – critically – alters the targeting mechanism from a household-based means test to an individually based poverty index. The poverty score will assign eligible individuals to one of three bands of assistance, based on the depth of their personal and neighbourhood deprivation. This index will become the universal platform for poverty-targeted interventions delivered across the departments and municipal entities of the City of Johannesburg.

The system also introduces pro-active priority referral of beneficiaries to the Job Pathways programme, an employment facilitation service designed to link the jobless to self-sustaining economic activities that will serve as an exit strategy from social assistance.

Madam Speaker, an amount of R20 million has been provided for the introduction of our revised social package. This will be used to conduct the research and establish directorate that will be responsible for the management of the social package.

5.3.11. Housing
Our budget for housing sees an increase of 130% in the coming year. The housing budget now stands at R721 million.

This allocation includes R371 million for housing top-structures, R90 million for land acquisition and R80 million towards mixed income housing projects where our goal is to also leverage funds from the private sector.

A further objective is to develop approximately 3 500 rental units in 2008/2009 and a further 4 000 for the next following financial year. Our projected figures for mixed housing are 10 000 in the coming year and 15 000 for 2009/2010.

JOSCHO's capital budget amounts to R239,8 million. R37 million is allocated for hostel conversion and medium density housing. Social housing and rental units receives R156,5 million of external funding. Our projections are that approximately 1 147 rental units, 1 851 special units, 468 hostel redevelopment units, 228 Inner-City residential units and 404 public stock refurbishment units will be developed during 2008/2009.

5.3.12. Clean City
An amount of R250 million funded from the City Cleaning levy and the stepped tariffs will go towards citywide cleaning and waste removal.

5.3.13. Other Features Of The Capital Budget
Madam Speaker, please let me briefly refer to a number of key initiatives and projects that will receive funding from this year's budget and reflect the wide range of services that the city provides but also our commitment to balanced, equitable and responsible spending of the revenue contributed by the people of Johannesburg.

· City Power receives approximately R 1 billion and includes investment in the Inner City, the management of power outages and our ongoing programme of bulk infrastructure refurbishment.

· Water's total allocation amounts to R872 million of which R93 million goes towards the upgrading of sewer networks, R50 million for Project Thonifo, R275 million for the management of bulk wastewater and R198 million for upgrading and renewal projects.

· Pikitup has been allocated R29 million of which R5 million will be spent on refuse bins, R14 million for increasing the lifespan of landfill sites and R4,8 million for garden sites.

· Roads will receive R242 million with the bulk going to the tarring of roads in Diepsloot, Ivory Park, Orange Farm and Doornkop.

· City Park's allocation amounts to R42 million. Of this, R12 million will go for parks development; R7 million towards beautification and the Botanical Gardens Education Centre receives R5 million.

· In the budget of the Development Planning and Urban Management Department, the Alexandra Renewal Programme receives R40 million and R70 million goes for engineering services in Cosmo City.

· You will recall that the City made a commitment of R2 billion over five years for Inner City Regeneration. This year, R200 million is included in the Budget. An amount of R105,8 million was received from the Neighbourhood Development Partnership Grant, that will be used towards the regeneration of the Kliptown CBD, Orlando Ekhaya, Stredford Station and the Vilakazi Streets precinct.

· R26 million will be utilised to upgrade and develop sport and community facilities in marginalised areas and in Soweto.

· The Centre for Excellence receives R8 million and a further R17 million is allocated towards community centres, social facilities and arts, culture and heritage.

· The Johannesburg Development Agency is at the forefront of exciting projects aimed at urban regeneration. We are allocating R92 million to the agency, which will go towards projects such as the Greater Ellis Park precinct (R10 million), Greater Newtown (R12 million), NASREC (R15 million) and the development of the Randburg CBD (R12 million).

5.3.14. Energy Demand Side Management
Madam Speaker, at the height of the recent energy crisis the City announced far-reaching measures to assist consumers in managing their demand for power and enabling them to switch to energy saving measures and devices. The City itself is setting the example by retrofitting council buildings with energy saving lighting.

We also announced our intention to introduce requirements for builders and developers to include energy saving measures in their designs and plans. Provision has been made in the Environment budget to develop the regulatory framework to enforce energy consumption reduction for existing and new developments. This will include new by-laws, guidelines and standards to which developers will have to adhere to.

The City is of the opinion that this is a sensible and responsible approach irrespective of whether load shedding continues or whether there is sufficient power available. We simply have to show a greater degree of respect for our environment and take pro-active measures to protect our finite natural resources.

The City will be raising approximately R1,2 billion, off-balance sheet funding towards demand side management interventions. This includes programmes such as the installation of solar water heating systems, the fitting of ripple controls on geysers and gas turbines.

The implementation of the Demand Side Management projects will result in a 10% reduction in energy consumption. Eskom has made a commitment that if the target is achieved the City will be exempt from pre-emptive load shedding.

6. CONCLUSION
Madame Speaker, the City of Johannesburg's long-term rating has again been upgraded. On 14 May 2008, our rating got upgraded from A+ to AA flat by Moody's International Credit Agency.

Often enough, these upgrades mean lower cost of borrowing and increased investor confidence. The two-notch upgrade reflects a very sound financial position and good governance.

Let's put our hands together for all of these meaningful efforts meant to build Johannesburg into a World Class African City for All.

Thank You