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Relief proposal to mitigate impact of lockdown crisis on NMB economy

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https://youtu.be/Y57Tey4-unw

The Democratic Alliance presented a press conference today on measures to protect the Nelson Mandela Bay Economy during the COVID-19 Pandemic Lockdown. The video above is of the Q&A Session after the presentation.

Dear MyPE

The economic despair residents and businesses find themselves in is a direct consequence of the way the Covid-19 pandemic national lockdown crisis has been impacting the Nelson Mandela Bay.

While there is radio silence from the ANC-led NMB coalition government, the DA has formulated an economic relief proposal.

The DA is proposing that the Metro invokes Section 29(1) of the Municipal Finance Management Act.

This states that the Mayor may, in case of emergency or under exceptional circumstances, authorize unforeseeable and unavoidable expenditure for which no provision was made in an approved budget.

This strategy should be used to move money away from capital projects that won’t be finished before the financial year-end due to the lockdown, provided such projects aren’t critical to basic services. Furthermore, no funds should be available for frivolous political spending.

We suggest that provision be made for relief of rates and water and sanitation charges, where a need for this exists.

We do not believe there should be blanket relief for all, as this will have a significant negative impact on the municipality’s cash flow. Our suggestion is that those who can show that their incomes have been adversely affected by the Covid-19 lockdown crisis should be able to apply for relief.

Only 22,89% of the City’s capital budgets were spent by January 2020. Some of these funds could be re-prioritized from infrastructure projects that have been significantly delayed due to the lockdown.

Relief for rates and municipal services should be considered on the basis of need, and means tests should help to identify those households, individuals, and businesses whose circumstances have changed due to the Coronavirus pandemic.

These would include:

  • ATTP customers
  • residential property owners in distress
  • small and medium businesses

Before any proposals can be considered the Chief Financial Officer (CFO) needs to provide a detailed overview of the spending and financial position of the Metro.

We have reliable information that the current collection rate is 83% – which represents a R170 million shortfall. We also expect a shortfall in electricity revenue.

Budget virements could be made and funds could then be moved within the EDTA to assist SMMEs.

The DA will scrutinise any budget proposals to ensure that proposed tariff increases for the 2020/21 financial year are kept low. We do not believe relief provided this year should be recouped next year.

We also propose that Capital Expenditure (CAPEX) for the 2020/21 financial year be kept low. The additional funds could be moved to Operational Expenditure (OPEX).

All parties should work together, put party politicking aside, embrace innovation, and be prepared to make hard and important decisions for the sake of the Metro and all its residents.

Regards

Nqaba Bhanga
DA EC Provincial Leader

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