Can you pay my billions? The year ahead for local government

04 January 2018 - 10:34 By Penwell Dlamini
Image: Dean Hutton/Bloomberg

It is not going to be an easy year for local government in 2018 as municipalities face yet another tough season of wage negotiations.

If not managed properly‚ a standoff could lead to strikes and the collapse of services across the country.

The unions are demanding:

  • A single-year agreement;
  • An across-the-board 15% salary increase or R3‚155‚ whichever is greater;
  • R2‚000 housing allowance for all employees;
  • R10‚000 minimum wage for all municipal workers; and
  • All benefits and conditions of service linked to salaries to increase by the same percentage as the across-the-board salary increase.

Negotiations at the SA Local Government Bargaining Council did not result in a wage agreement in the last quarter of 2017 and talks will continue at the beginning of the year.

If no agreement is reached‚ residents will have to find new ways of dealing with refuse collection‚ potholes and all other basic services provided in municipalities.

Another serious challenge is the level of debt that councils owe Eskom and water utilities. At the end of 2017‚ Eskom and water utilities began disrupting supply in municipalities that had failed to pay billions.

Linked to the debt is the economic environment in which municipalities have to operate. As the country went into a technical recession in 2017‚ the municipalities suffered the most. Revenues fell significantly as more people lost their jobs and were unable to pay their utility bills. The economy will have to recover faster in 2018 for the municipalities to start enjoying improved revenue.

The other challenge will be specific to the municipalities that were won by the Democratic Alliance‚ such as Johannesburg‚ Tshwane and Nelson Mandela Bay.

The year 2018 will mark the beginning of a new financial year for the DA to start turning things around. It has not been an easy task for the DA to turn around these three metros‚ which were previously run by the African National Congress. Residents in these metros will start looking for better services and efficiency in how the municipalities are run.