Stats SA has released its 2023 financial census of municipalities, detailing the revenue collected from South African residents and how it was spent.
The data reveals that municipal revenue increased by 8.9%, from R585 billion in 2022 to R637 billion in 2023.
The largest portion of total municipal revenue, R517 billion for the year ending 30 June 2023, came from government transfers and subsidies (27.7%).
This was followed by revenue from electricity sales (25.6%), property rates (16.6%), and other revenue sources (12.7%), which include fines, penalties, licenses, permits, and additional transfers and subsidies.
Revenue from water sales made up 10.5%, refuse removal charges 2.7%, and sewerage and sanitation charges 4.3%.
The report also indicated that municipalities' expenditures matched their revenue, signifying they spent all the money they collected.
Stats SA noted that employee-related costs (26.4%) were the largest contributor to the municipalities' total operating expenditures of R505 billion (total expenditure less surplus).
Other significant expenses included electricity purchases (22.6%), debt impairment (10.9%), contracted services (9.5%), depreciation, amortization, and impairment (8.2%), other operational costs (7.5%) – including travel, audit fees, bank charges, and insurance – and water purchases (5.8%).
Smaller expenditure categories were councillor remuneration (0.9%), transfers and subsidies (1.1%), inventory consumed (1.9%), other expenditures (2.1%) – such as losses on asset disposal and operating leases – and finance costs (3.2%).
Here is the breakdown of how every R100 of tax money is spent:
R26.40 on employee costs
R22.60 on electricity
R10.90 on debt
R9.50 on contractors
R8.20 on depreciation, amortisation, and impairment of municipal assets
R7.50 on other operational costs
R5.80 on water
R9.90 on other minor financial expenditures
Despite this expenditure, many South Africans are turning to the private sector for basic services. Recent Stats SA data show a significant decline in the use of government services, attributed to limited access, distrust in state institutions, and corruption.
PwC analysed the report and concluded that the quality of public services continues to deteriorate. Corruption and inefficiency have weakened the state's capabilities, leading citizens to seek private alternatives.
The public sector faces increasing pressure due to declining financial support and resources, making it challenging to maintain service quality.
The latest figures show a drop in the use of public transportation services from over 43% in 2019/20 to 37.5% in 2022/23. Similarly, the use of public clinics decreased from 35.4% to 31.7% during the same period.
Services such as courts (2.4%), public housing (2.4%), and correctional services (0.5%) were among the least used in 2022/23.
Stats SA's findings illustrate a worrying decline in the utilisation of government services.
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