Cape Town Budget of Burdens, Not Benefits

GOOD Statement by Anton Louw, GOOD City of Cape Town Councillor:

From a speech delivered during the City of Cape Town Council meeting, Budget Vote

Madam Speaker

While the DA vocally opposes tariff hikes in Johannesburg and Tshwane, the 2 metros we like to compare ourselves with and both governed by coalition governments the DA is not part of, it implements even steeper increases in Cape Town, the one metro where it governs with a majority, for now.

DA Johannesburg finance spokesperson Chris Santana condemned the proposed hikes, stating, “These above-inflation hikes will plunge residents deeper into financial distress”. The DA has criticised above-inflation increases in Johannesburg, specifically mentioning increases to rates and taxes, which are perceived to be placing a significant burden on residents. The party argues that these increases are making it increasingly difficult for residents to afford basic services, particularly in light of the broader cost of living in South Africa.

Homeowners in the City of Tshwane face a newly proposed cleaning levy that critics say amounts to double taxation. The levy is only aimed at properties valued above R250,000 that do not have an existing municipal waste account and instead use private waste collection services. The DA has also criticised Tshwane’s proposed new city cleansing levy, saying this is another tax attack on overburdened consumers at a time when property rates will already be higher because of a new valuation roll.

But when the DA governs, like here in Cape Town, they impose the very same burdens they condemn elsewhere, turning a blind eye to over 14,000 public objections.

While Cape Town will argue its increases are less than any other metro, which might be true on paper, however when you use the city calculator adding all the fix charges, it does not agree with the statement.

Average increase:

• Johannesburg 11%
• Tshwane 7%
• Cape Town 4% to up more than 20%

The budget is a statement of power, while telling residents to be grateful.

The City penalises the very ratepayers who have historically maintained their properties, paid monthly and upheld the city’s financial backbone.

If the budget truly uplifts the poor, we would not see year on year:

• Raw sewerage in informal settlements
• Shared taps between households
• Gangs patrolling community spaces
• And more solid waste pump into the sea

Now, this well-run city proposes a debt write-off, of R2 billion on irrecoverable debt which could have been used to reduce tariffs. The middle class pays more to subsidise the inefficiencies. This proposal comes at a time that the City proposes a failed budget that will cost the exact residents who funds the budget year on year more. The city has failed its residents by not collecting these amounts due to its own ridiculous tariff increases since 2021, which is unaffordable.

While the City claims yearly that the budget is pro poor, the opposite is true and this proposed write off is a clear indication of it. The city said the unbearable burden on residents and businesses had adversely affected its debt book, which has ballooned to nearly R10 billion over the past 4 years since 2021, also the same time the mayor was appointed.

Since the mayor’s appointment the capital budget has tripled and the only way to fund this is to charge residents excessive tariffs

The city states that there has been no significant economic growth since Covid 19 pandemic. Instead of blaming itself for excessive tariff increases that residents cannot afford, it now blames Covid 19. Yet when I look at my own clients their businesses have excelled since Covid.

The Mayoral committee member for finance added that the write-off incentive aimed to create a culture of payment, while the opposite is actually the reality in the real world. People will now wait for the next write-off.

The high tariff increases and capital budget are now catching the City and the residents have to suffer for their failed financial planning. This proves that the city’s indigent relieve are not sufficient and not a pro poor budget.

The plan to use property valuations as the basis for water and sanitation tariffs, as well as the restructuring of the metro’s electricity tariffs, poses serious disadvantages for the City’s homeowners. It places an unfair financial burden on residents.

According to Section 74(2) of the Local Government: Municipal Systems Act, tariffs must be equitable and reflect the cost of providing the service as well as its use. Linking charges to property valuations is contrary to the provisions of the act.

The introduction of the cleaning levy, linked to your property value, would be unfair, as the costs of these municipal services are already levied as part of property rates and should therefore already be used to benefit the broader community. The levy has been part of the rates tariff and has now been moved under a separate tariff by removing it from rates, yet we do not see a decrease in the rates tariff. Furthermore, due to the fact that it’s not included as part of the rates tariff it will also attracted VAT at 15%.

We do not support this budget

GOOD Environmental Justice: The party advocates for environmental justice and protection of natural resources.

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