Staff costs biggest outlay

Municipal salaries, medical and pension contributions again top expenditure – survey

SALARIES and medical aid and pension fund contributions have once again emerged as the largest contributors to municipal total operating expenditure across the country, according to the financial census of municipalities for 2019 from Statistics SA.

According to the survey, “In 2019, employee-related costs were the largest contributor, 28.1%, to the total outlay of municipalities”.

The other costs were: electricity purchases (21%); depreciation and amortisation (8.6%); bad debts (8.5%), contracted services (7.6%), and water purchases (6.4%).

Under the label “other expenditure” came costs such as administration charges/fees, books and magazines and conference expenses, which consumed 7.3% of the expenditure pie.

General expenditure, which consists of, among others, accommodation, travel and subsistence costs, audit fees, bank charges, consultancy and professional fees, fuel and oil, hiring of equipment, insurance costs, subscriptions and membership fees and telecommunication costs, took up 5.1%.

The remaining budget went to interest paid (2.9%), repairs and maintenance (2%), grants and subsidies paid (1.5%), and remuneration of councillors (1.1%).

Statistician-general Risenga Maluleke said: “For the year to June 30, 2019, the largest contributor to municipal revenue of R402 503 million was grants and subsidies received (29.2%), followed by electricity sales (26.2%).

“Property rates received brought in 16.5% and other revenue, which consists of fines, licences and permits, public contributions and donations etc, brought 11.9%,” said Maluleke.

According to Statistics SA, the rest was made up from water sales (9.6%), sewerage and sanitation charges (3.8%), and refuse removal charges (2.9%). The survey said: “As at June 30, 2019, municipalities owed their lenders, suppliers and other creditors a combined amount of R267 716 million, 11% more than what they owed as at June 30, 2018.

“The provinces which showed the highest percentage increases between 2018 and 2019 were North West (29.5%), Mpumalanga (27.7%), Northern Cape (16.7%), Free State (15.3%), and Limpopo (12.3%). The provinces which had the lowest percentage increases… were Western Cape (4%), Gauteng (8%), Eastern Cape (8.8%), and KwaZulu-Natal (9.9%).”