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Gauteng e-tolls debt proposal to be submitted by mid-December

Image of Gauteng Finance MEC Jacob Mamabolo

Gauteng Finance MEC Jacob Mamabolo

28th November 2023

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

     

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The Gauteng provincial government (GPG) will table a “concrete proposal” to national government by December 15 outlining plans to pay off the province’s portion of the long-contested e-tolls debt and switch off or repurpose the gantries, assures Gauteng Finance MEC Jacob Mamabolo.

Unpacking the province’s Medium-Term Budget Policy Statement (MTBPS) on Tuesday, he said that it was now time to “conclude the modalities of the settlement of the debt” and that feedback on the proposal and “finality” were expected before the State of the Province Address early next year.

“We reaffirm our longstanding commitment to pay the debt, including augmenting our own provincial revenue without burdening the equitable share, especially priorities for social services such as education, health and social welfare,” he said, noting that it remained an increasingly pronounced risk to Gauteng’s fiscus in resolving the challenges related to raising revenue to settle Gauteng's R12.9-billion, or 30%, of the e-tolls debt, as announced in a directive by Finance Minister Enoch Godongwana during the 2022 national MTBPS.

“The gantries should be switched off, and be repurposed and repositioned for security, crime prevention and roads-related law enforcement services,” he said.

In line with this, the GPG aims to strengthen its revenue-generation capacity to put a compelling case to national government to switch off the gantries.

Increasing and enhancing revenue collection also remains a significant priority of the GPG amid an increasingly constrained fiscus resulting from fiscal consolidation measures.

“It has become more important to seek alternative sources of funding to ensure that we maintain spending on key priorities and projects of the provincial government,” Mamabolo said, noting that budget cuts from national meant that the province must do more with less.

Revenue enhancement efforts during the current administration have enabled Gauteng to collect R32-billion from its own revenue sources, including hospital patient fees and motor vehicle licence fees, since 2019.

Gauteng is now intensifying revenue enhancement efforts and exploring alternative sources to maintain funding of key priorities.

New revenue enhancement initiatives include enhancing banking initiatives to ensure motor vehicle licence revenue collected is immediately deposited and reflected in the provincial government fiscus; and the expansion of smart driving licensing testing centres to 65 licensing sites in Tshwane, Ekurhuleni, Johannesburg, Sedibeng and the West Rand to improve service delivery in township, informal settlement and hotel (TISH) areas.

Other revenue boosters comprise implementing new casino regulations that transition from a flat tax structure regime of 9% to a proposed flexible sliding scale tax structure ranging from 8% to 15%, applied to gross gaming revenue levels; the issuance of nine new bingo licences by the Gauteng Gambling Board as part of a transformation strategy to introduce new players from previously disadvantaged groups; and pursuing e-commerce and cashless strategies that enables liquor traders to view their bills electronically and make payments online through a mobile payment application.

Meanwhile, as Mamabolo outlined an increase in GPG’s 2023 main budget of R4.5-billion, from R158.9-billion to R163.5-billion, mainly to fund energy projects and the expansion of frontline services in TISH areas, he pointed to initiatives aimed at cutting red tape in municipalities.

Investments in real estate, manufacturing plants, automotive plants, residential properties and industrial parks, besides others, are critical for the financial sustainability of municipalities.

“In our engagement with the MMCs of Finance at the CFO Roundtable, cutting red tape in municipalities carries a great potential to improve investor sentiment and make it easier to do business in municipalities.”

The CFO Roundtable was held in September, bringing together Gauteng Provincial Treasury (GPT) and the private sector CFOs, represented by Chartered Institute of Business Accountants, Standard Bank and the Chartered Institute of Government Finance Audit and Risk Officers.

At the time, it was emphasised that good governance and well-managed public institutions had great potential to enhance investor confidence and grow gross domestic product, he outlined.

GPT commissioned a project manager to analyse the details of improving red tape in municipalities, including the turnaround times to conclude certain compliance with municipal laws affecting the investment space in the municipalities.

“Once GPT completes the baseline assessments on the ease of doing business in our municipalities, we will embark on wider consultations with MMCs of Finance and the Gauteng Department of Cooperative Governance and Traditional Affairs to then decide on a pilot programme on how to cut red tape,” Mamabolo explained.

“Without pre-empting the conversations on this matter, one of the best practices could be to introduce a concierge of business support services in municipalities to promote the ease of doing business, including leveraging smart technologies in this regard.”

During the budget speech, Mamabolo also highlighted that the GPG had entered into an agreement with City Power, concluding a memorandum of understanding (MoU) that will enable City Power to act as the implementing agent to provide residents with power generation solutions to improve the on- and off-grid solutions, such as leveraging renewable energy technology.

Further, the GPG will be appointing a transaction adviser to assist with technical skills to determine the feasibility, viability and cost-effectiveness of City Power’s proposed solutions.

“Once we have received professional advice, we can determine the next steps,” he said, concluding that the Gauteng Department of Infrastructure Development is also leading the province’s initiatives for rooftop solutions, particularly on government facilities, with immediate focus on health facilities.

Edited by Creamer Media Reporter

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