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We Have Warned of Johannesburg’s Looming Bankruptcy for a Long Time

For years, the Freedom Front Plus (VF Plus) warned Johannesburg’s ANC administration that exorbitant salary negotiations and a culture of non-payment would steer the City straight into bankruptcy. These warnings fell on deaf ears, though, and the consequences are now evident. The controversial R10,3 billion salary increase offered to workers last year to avert labour […]

The post Freedom Front Plus has warned of Johannesburg’s looming bankruptcy for a long time appeared first on Freedom Front Plus.

For years, the Freedom Front Plus (VF Plus) warned Johannesburg’s ANC administration that exorbitant salary negotiations and a culture of non-payment would steer the City straight into bankruptcy.

These warnings fell on deaf ears, though, and the consequences are now evident.

The controversial R10,3 billion salary increase offered to workers last year to avert labour action ahead of the G20 Summit was a turning point. At the time, the Freedom Front Plus warned that implementing such a decision would not only undermine the City’s short-term liquidity, but also its long-term sustainability.

And now Johannesburg’s debt burden confirms this. Outstanding municipal debt currently stands at R70 billion, with Soweto being responsible for the largest portion. While collection rates in the suburbs are above 88%, Soweto’s rate remains at only 40% to 50% – a culture of non-payment that the ANC has allowed to flourish over many years.

In addition, the Gauteng provincial government still owes the City approximately R1,4 billion.

The Freedom Front Plus also warned that the City’s financial credibility would be compromised. This warning materialised with Moody’s considering to downgrade Johannesburg’s credit rating and the Johannesburg Stock Exchange (JSE) suspending trading in the City’s bonds. These steps followed the City’s failure to publish its audited financial statements in time.

Even the Minister of Finance, Enoch Godongwana, has had to step in and try to stop the ANC administration’s mismanagement and improper salary negotiations.

The proposed salary increases will form part of the budget debate at the end of May.

The Freedom Front Plus will not support a budget that forces the City’s ratepayers to shoulder the burden of poor financial management and rash decisions.

Residents should register and vote for the Freedom Front Plus on 4 November to ensure that Johannesburg is entrusted to the hands of an honest and transparent administration.

FF+ Manifesto on Rural development: Promoting development in rural areas.

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