The impact of population growth on municipal revenue: implications for South African municipalities

Date
2020-03
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Stellenbosch : Stellenbosch University
Abstract
ENGLISH ABSTRACT: This research examines the relationship between population growth and municipal revenue generation between 2001 and 2016. The impact of population growth in terms of natural increase and net migration over time on municipal revenue generation is not known. It is assumed that municipalities that experience rapid population growth does not necessarily receive a comparable change in revenue that would allow them to deliver basic services. This could be due to the majority of population growth attributed to an increase in indigent households. Indigent households are defined as poor/poorer households that receives free basic services such as water, electricity, sanitation and refuse removal (DPLG 2005:30). Municipal revenue in this research paper is categorised as ‘total municipal revenue’ and ‘own municipal revenue’. Total municipal revenue consists of revenue generated from property tax, user service charges and equitable share allocations & conditional grants paid from the national fiscus. Own municipal revenue is generated from property tax and user service charges. A compound annual growth rate index was developed to determine the relationship between municipal revenue and population growth nationally. The eight (8) metropolitan municipalities and two hundred and twenty-six (226) category B municipalities in South Africa were analysed. The findings indicate that total municipal revenue nationally increased at a positive and higher rate than population growth. A compound annual growth rate index was also developed to determine the relationship between ‘own’ municipal revenue and indigent households for the Western Cape province municipalities. The sample consisted of the City of Cape Town Metropolitan Municipality and five (5) category B municipalities, one (1) per district municipality which had the highest population growth percentage between 2001 and 2016 in the Western Cape province. Conclusions drawn suggest that indigent households had an impact on ‘own’ municipal revenue generated. Own municipal revenue grew at a slower and much lower rate. The lack of an adequate municipal property tax base in most municipalities contributes towards this phenomenon (Manyaka 2014:132).
AFRIKAANSE OPSOMMING: Hierdie navorsing bestudeer die verhouding tussen bevolkingsgroei en munisipale inkomste generering tussen 2001 en 2016. Die impak van bevolkingsgroei in terme van natuurlike groei en net migrasie oor tyd op munisipale inkomste generering is onbekend. Dit word aanvaar dat munisipaliteite wat versnelde bevolkingsgroei ervaar nie noodwendig `n vergelykbare verandering in inkomste ontvang nie wat munisipale dienslewering belemmer. Laasgenoemde kan toegeskryf word aan `n toename in hulpbehoewende huishoudings. Hulpbehoewende huishoudings word gedefineer as finansieël behoeftige huishoudings wat basiese dienste soos water, elektrisiteit, sanitasie en vullisverwydering gratis ontvang (DPLG 2005:30). Munisipale inkomste word in hierdie navorsing gekategoriseer as ‘totale munisipale inkomste en ‘eie munisipale inkomste’. Totale munisipale inkomste bestaan uit inkomste wat ontvang word vanaf eiendomsbelasting, verbruikersheffings op dienste en billike aandeel allokasies & kondisionele toelaes wat ontvang word vanaf die nasionale belastingowerhede. Eie munisipale inkomste word ontvang vanaf eiendomsbelasting en verbruikersheffings op dienste. `n Saamgestelde groei koers index was gebruik om die verhouding tussen munisipale inkomste en bevolkingsgroei te bepaal op `n nasionale vlak. Die agt (8) metropolitaanse munisipaliteite en twee honderd ses en twintig kategorie B munisipaliteite in Suid Afrika vorm deel van die analise. Bevindinge van die saamgestelde groei koers index dui aan dat munisipale inkomste op `n nasionale vlak positiewe en hoër groei toon teenoor bevolkingsgroei. `n Saamgestelde groei koers index was ook gebruik om die verhouding tussen eie munisipale inkomste en hulpbehoewende huishouding groei in munisipaliteite in die Wes Kaap Provinsie te bepaal. Die steekproef vir analise bestaan uit die Stad Kaapstad Metropolitaanse Munisipaliteit en vyf (5) kategorie B munisipaliteite, een (1) per distriksmunisipaliteit in die Wes Kaap Provinsie. Gevolgtrekkings van laasgenoemde saamgestelde groei koers index dui aan dat hulpbehoewende huishoudings `n impak het op eie munisipale inkomste. Eie munisipale inkomste groei teen `n stadiger en laer koers. Die tekort aan `n voldoende eiendomsbelasting basis in baie munisipaliteite lewer `n bydra tot hierdie verskynsel (Manyaka 2014:132).
Description
Thesis (MA)--Stellenbosch University, 2020.
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