Be ready to pay more: What Polokwane’s draft budget means for you

POLOKWANE – Polokwane Mayor John Mpe tabled the municipality’s 2025/26 draft budget of income and expenditure, amounting to R6.445b, during a council meeting last Wednesday.

The proposed municipal services tariffs offer little relief for the majority of already cash-stricken residents.

The draft budget will now be the subject of a public participation process and it remains to be seen to what extent the input of residents during the process will influence the municipality’s final resolution before the tariffs are implemented on July 1.

According to the draft budget, the tariff for services other than electricity and water will increase by 6%, which is CPI plus 1.6%. Water tariffs will increase by 10.91% which is equal to the tariff increase by Lepelle Northern Water. Electricity tariffs will increase by 12.74%. This, however, is subject to Nersa finalising the process before May this year. An increase of 5.4% in property assessment rates is proposed.

A tariff increase of 5.4% for sewerage services as well as for waste removal is based on the input cost assumptions related to water and the cost of bulk purchases, cost of the social package to indigents, salary increases with effect from July 1, 2025 and the increased maintenance of network and infrastructure are general contributory factors for the increase in levels of rates and service charges.

In motivating the budget, the mayor said the municipality is unfortunately not immune to the economic risks facing the nation and the world and therefore a greater need for a balanced and realistic budget.

“To mitigate and adapt to these challenges, the municipality will have to resort to budgetary constraints and enforce better processes for better productivity – “do more with less”, Mpe said and added that the budget process will have to pass the National Treasury’s assessment of a funded budget so that service delivery can continue without financial constraints impeding its basic service delivery goals.

Mpe explained that, to meet these objectives, the municipality has applied some key measures in its budget, which includes a reduction in operational expenditure, and in particular where more internal staff can be utilised instead of depending on service providers where practical, increases in tariffs in line with the upper inflation targets of SARB except for electricity and water-related tariffs, which is approved by Nersa and the water board respectively, as well as allocating resources to revenue generation projects and budgeting for adequate cash backed reserves.

In addition, the municipality will maintain hefty penalties for businesses and residential consumers who breach or illegally connect meters and to sustain its cash flows, credit control/cut offs will continue to be implemented on a daily basis with a standby team to assist those consumers willing to settle their debt after hours.

Good news is that the budget still provides for subsidising of indigent households to around R28m.

This subsidy includes 6Kl of free water, 100 units of electricity, and a 100% subsidy for refuse removal and sewerage charges. A 100% rebate on assessment rates will also be given for indigent households.

To qualify as indigents, a household income must not exceed R5 691 per month and the policy is reviewed to also cater for child-headed families and the qualifying people with disability. The municipality further grants 80% rebates to owners of residential properties who depend on pensions or social grants provided the household income does not exceed R10 920 per month.

DA spokesperson on finance, Jacques Joubert said with the current cost of living, the DA in Polokwane suggested that the tariff increase should be linked to CPI, which would mean only a 3.2% increase with the exception of the water and electricity tariff increases for which the municipality does not have much control over as these increases are a cost flow through from LNW and Eskom.

The draft budget is available on the municipality’s website.