The Thulamela Municipality approved its budget last month amid the usual fanfare and promises. But what does it really mean for the people living in this part of Vhembe? We took a deep dive into the figures to get a sense of what may happen in the coming year.
How much more will taxpayers be expected to fork out for services? How will the money be used, and can residents expect meaningful improvements?
Where does the money come from?
Thulamela is heavily reliant on government grants and subsidies to make ends meet. Unlike municipalities such as Makhado and Musina, which generate some profit by selling electricity, Thulamela must pay its bills mainly through property rates and levies. This revenue is, of course, not nearly enough – and government has to lend a helping hand.
By far the biggest chunk of income comes from the Equitable Share grant. Last year, this added R618.6 million to the municipal fiscus, and for 2025/26 it is expected to rise R624.33 million. The advantage of this funding is that it may be spent on operating expenses, such as salaries (which we will get to later), and is not restricted to specific projects.
To cover other operational expenses, the municipality also relies on several additional grants. These include:
* Infrastructure Development Grant: R4.8 million
* Extended Public Works Programme Integrated Grant: R3.8 million
* Municipal Infrastructure Grant (MIG): R6 million for operations
* Energy Efficiency and Demand Side Management Grant: R4 million
* Local Government Financial Management Grant: R1.9 million
* SETA allocation: R800,000
In total, the municipality expects to collect R646.15 million in grants and subsidies. This is slightly lower than the R648.65 million received in the past year, and significantly below the R675.98 million projected in the 2024/25 budget.
For capital projects, Thulamela depends on two other national government grants:
* MIG: R132.75 million
* Neighbourhood Development Partnership Grant: R2.1 million
Rates and taxes to increase
Since national transfers and grants bring in only around R781 million, the rest of the funding must come from local taxpayers.
The council has announced a general increase of 4.3% in municipal tariffs, which is in line with inflation but below the rise in costs such as salaries. The budget predicts a 4.4% increase in costs for the average middle-income household.
Excluding transfers and subsidies, Thulamela hopes to collect R360.57 million in the coming year. Whether this target is realistic remains to be seen. In the past financial year, there was a significant gap between the budgeted and actual income. In 2024/25, the pre-audited income is R325.57 million – well below the R349.38 million initially budgeted.
The largest single source of own revenue is property rates, which brought in R87.99 million last year. A new property valuation roll came into effect on 1 July, which should boost revenue. The municipality has also undertaken a data-cleaning exercise, and properties that were previously "unbilled" are now expected to be charged.
Investment income contributed a substantial R83.4 million last year and is projected to increase to R93.5 million. Waste-management service charges are expected to yield R32.7 million, while fines, penalties and forfeits are expected to bring in R4.5 million.
Whether the municipality will succeed in collecting outstanding debt remains questionable. This is a recurring concern raised by the auditor-general. The council has made provision for R81.35 million in debt impairment. According to the budget note on funding measures, debt impairment accounted for 61.3% of total billable revenue in the pre-audit outcome. The new budget allows for 52.6%.
The discrepancy between projected and actual income is evident in the cash-flow summary of the latest budget. In 2023/24, audited receipts (excluding transfers and subsidies) amounted to R296.7 million. The pre-audited figure for 2024/25 shows that only R237.31 million was received.
Where will the money go?
As expected, the largest portion of operating income is spent on salaries. A total of 40.86% (R391.14 million) goes towards employee remuneration. An additional R39.92 million is allocated for councillors' remuneration. The budget provides for a 5.1% increase in salaries, though this may change. Councillors' remuneration has also been increased by 5.1%, pending any revision of the upper limits.
In the next year, Thulamela expects to spend R181.18 million on consultants and contractors. An amount of R23.9 million has been budgeted for legal advice and litigation alone.
This means the municipality will spend 63.96% of its operating budget on salaries and outsourced services.
Of the remaining 36% of operational income, 8.5% (R81.35 million) is not expected to materialise and is budgeted for under debt impairment. Almost 9% is allocated to depreciation and asset impairment, leaving just over 18% of income available for actual service delivery.
A few roads will be constructed
As mentioned earlier, the municipality expects to receive R132.75 million in MIG funding, which will be supplemented by R49.36 million in own funding.
In her budget speech, Mayor Sarah Rambuda outlined some of the projects to be funded from the MIG. These include roadworks in Thohoyandou, Maniini, Makhuvha, Mapate and Lwamondo. The Tshilamba arts centre will be funded from the municipality's own resources. Several graders and vehicles are also to be purchased.
"Roads transport comprises 70% of the budget. This is caused by the backlog of roads infrastructure within the municipality, and the high-cost rate of tar per km which ranges between R9–10 million," said the mayor.