Budget shortfall, not deficit – Modise slams DA claims

The Citizen

15 hours ago

Tshwane's MMC for Finance Eugene Modise has reassured residents the city's financial stability and service delivery are top priorities.
This assurance comes amid claims made by the DA of a growing budget deficit.
Modise hit back at claims that the metro was spending beyond its means, asserting that the finances remained under control and its budget is funded.
DA spokesperson for Finance Jacqui Uys expressed concern over what she described as a growing budget deficit under the current ANC/EFF/ActionSA coalition. Uys claimed that the deficit had grown by R859-million since the DA left office in September 2024.
'This, despite claims from Deputy Mayor Eugene Modise that the city's financial woes are over,' Uys said.
She explained that in June 2024, the city adopted a funding plan to reduce a R3-billion deficit.
'By September 2024, our plan had boosted collections by R315-million. However, by the end of April 2025, that positive trend had reversed, with the city falling R859-million short of its collection target, a 19% deviation,' she said.
Modise, however, clarified that the R859-million figure is not a deficit but rather a shortfall against the revenue collection target set in the city's funding plan.
'As of April 30, the city had collected R33.6-billion, just R859-million short of the R34.5-billion target, a variance of 2.5%,' he explained.
He added that the shortfall is being managed through daily cash flow monitoring and is largely the result of customer non-payment.
Despite the deviation from the funding plan, Modise emphasised that the city's actual revenue performance against the approved budget stands at nearly 100%, with a minimal variance of R26-million.
He further noted that the National Treasury had independently confirmed that Tshwane's 2025/26 budget is funded.
Responding to DA concerns over a decline in revenue collection since September 2024, Modise said the city's collection rate averaged 88%, with a current figure of 86% as of April.
'To improve collections, the city is enforcing its credit control and debt collection policies, and has rolled out campaigns such as the Festive Season Bonanza, Black Friday discounts, and the Incentive and Debt Relief Scheme to encourage customers to settle outstanding debts,' said Modise.
On the reported R5.7-billion in outstanding debt, he confirmed that recovery efforts are ongoing under the Mayoral Charter on Revenue Enhancement and Financial Recovery, a framework adopted in June 2024 and still being implemented by the current administration.
To curb spending and ensure financial stability, Modise said the city had adopted strict cost-containment measures. These include:
– Postponing the filling of vacancies until July 1;
– Reducing overtime to critical services only and halting Sunday overtime, except for emergencies;
– Capping overtime to 40 hours per service;
– Tighter management of acting allowances.
'These internal controls were approved during the February 2025 Technical Budget Steering session and are part of our strategy to manage expenditure responsibly,' Modise explained.
He concluded by assuring residents and stakeholders that Tshwane remains financially stable and capable of meeting its obligations for the 2025/26 financial year.
'National Treasury has confirmed our budget is funded. We remain committed to improving our financial health and ensuring consistent service delivery,' he said.
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