Yesterday National Government announced that employee gross earnings across South Africa are down by R19 Billion rand in the first quarter of 2017. (See: Employee Gross Earnings down by R19 Billion)
Later National Government announced that Municipal revenue across South Africa increased by R27 Billion in the 2016 financial year in comparison to 2015.
The frightening number in the revenue streams is that the largest contributor (at 30.9%) to municipal ‘revenue’ was Grants and Subsidies received. Someone help me here – how can money from the taxpayer become ‘revenue’ in the hands of the municipality?
More concerning is the statement that Grants and Subsidies paid represent 2% of the total contribution to municipal total operating expenditure – without sight of the actual numbers received and paid out the percentages paint a bleak picture.
Putting the two announcements together makes for more concern and illustrates a continuing squeeze on the beleagured consumer struggling to keep their head above water.
Municipalities across the country received an income of R333 billion from all sources of 2016 income, which represents an increase of R27 billion compared to R306 billion in 2015:
“The largest contributor to municipal revenue for the year ended 30 June 2016 was grants and subsidies received (30.9%), followed by electricity sales (28.3%), property rates received (14.7%), other revenue (11.0%), water sales (8.9%), sewerage and sanitation charges (3.5%) and refuse removal charges (2.7%),” Statistician-General of South Africa Dr Pali Lehohla said.
The revenue for metropolitan municipalities in 2016 was R191 billion compared to R178 billion in 2015, while the revenue for local municipalities for 2016 was R116 billion compared to R106 billion in 2015.
The revenue for districts municipalities in 2016 was R250 billion compared to R229 billion in 2015.
Dr Lehohla released the results of the 2016 Financial Census of Municipalities in Pretoria on Wednesday.
The survey collected a variety of financial information from local, district and metropolitan municipalities.
The financial data is for the period 1 July 2015 to 30 June 2016 for all 278 municipalities.
The municipal expenditure patterns showed that municipalities spent a total of R311 billion in 2016.
“The largest contributor to municipal total operating expenditure was employee related costs (26.3%), followed by electricity purchases (22.6%), depreciation and amortisation (8.9%), other expenditure (8.2%), bad debts (6.7%), contracted services (5.9%), water purchases (5.6%), general expenditure (5.5%), repairs and maintenance (4.4%), interest paid (2.8%), grants and subsidies paid (2.0%) and remuneration of councillors (1.1%),” Dr Lehohla said.
According to the statistics, expenditure for metropolitan municipalities in 2016 was R175 billion compared to 2015 when it was R161 billion.
The expenditure for local municipalities in 2016 was R115 billion compared to R107 billion in 2015, while expenditure for district municipalities was R209 billion last year and in 2015 it was R196 billion.
Dr Lehohla said the cost structure of district municipalities differs from local and metros because they are organised differently.
“The main income source for metros is from sales of electricity and for local and district municipalities is from grants and subsidies. Salaries take quite a big chunk of local and metro municipalities,” he said.
About a quarter of the locals and metro municipalities expenditure is on salaries.
The total employee related costs for 2016 was R81.8 billion compared to R73.4 in 2015.
Employee related costs for 2016 in the metros was R45.9 billion, in local municipalities it was R29.0 billion and districts municipalities it was R6.9 billion.
“As at June 2016, municipalities owed their lenders, suppliers and other creditors a combined amount of R210.7million [which is] 7.5% more than what they owed as at 30 June 2015.
“The provinces which showed the highest percentage increase between 2015 and 2016 were Free State (27.6%), Northern Cape (17.9%) and Mpumalanga (9.0%),” Dr Lehohla said.
Purchases of electricity increased from R62.2 billion in 2015 to R70.3 billion in 2016, while sales of electricity reflected an increase from R85.6% billion in 2015 to R94 billion in 2016. – SAnews.gov.za
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