A “Subscription Model” for Basic Rights

GOOD Statement by Sandra Dickson, GOOD City of Cape Town Councillor:

The Draft 2026/27 Budget effectively formalises a “City-as-a-Service” model, where the privilege of being a resident is increasingly defined by mandatory, high-cost subscriptions rather than actual service usage. While the administration markets this as a “City of Hope”, a critical analysis of the figures suggests a strategic pivot to protect municipal revenue against a modern, resource-efficient citizenry. By locking in billions through Fixed Charges, the City has built a fiscal fortress that is largely immune to the conservation efforts or green investments of its own people.

The most transparent example of this “revenue-first” strategy is the aggressive escalation of the Home User electricity tariff. The Fixed Charge is set to rise to R424.30 per month (including VAT). This is not a fee for power; it is a fee for the potential to use power.

The base Fixed Charge (excluding VAT) has climbed from R219.21 in 2024/25 to R368.96 for 2026/27, a staggering 68.3% increase in just two years. For a household that has spent thousands on solar panels to reduce its carbon footprint, this fee acts as an “efficiency tax”. The City is ensuring that even if you use zero units of municipal power, it still collects over R5,000 a year from you just for the connection.

The City has highlighted a 10.21% decrease in the property rates factor. However, when viewed alongside the 2025 General Valuation (GV2025), this is a mathematical necessity to avoid public outcry, not a genuine reduction.

As property values surge, the “Valuation Reality” sets in: if a home’s value increases by 20% in the latest valuation, a 10% lower rate still results in a net increase on the monthly bill. By adjusting the rate just enough to keep total revenue “neutral”, the municipality captures the increased wealth of the property market without appearing to raise taxes. The move to raise the rates-free threshold to R500,000 is a minor concession compared to the massive scale of the new valuations.

The treatment of City-wide Cleaning is the clearest indicator of the shift away from “pay-for-what-you-use”. This is now a standalone, mandatory fee based strictly on property value bands. For a property valued at R2 million, the budget sets a fixed monthly charge of R57.30 (including VAT).

Because this is a fixed charge, there is no behavioural incentive. Whether you are a zero-waste household or clean your own street, you are locked into a mandatory R687.60 annual “subscription”. This ensures cleaning revenue scales automatically as property prices rise, regardless of actual operational costs in a specific neighbourhood.

The budget is anchored by a R13.03 billion Capital Budget for the parent municipality. While the City promotes a “pro-poor” narrative, with the R27,000 monthly income cap for pensioner rebates being a vital safety net, it highlights a shrinking middle ground.

As the City expands relief for the most vulnerable, it simultaneously hardens the costs for everyone else through these unavoidable fixed charges. The “City of Hope” relies on a massive infrastructure pipeline that must be funded. By moving towards a corporate revenue model dominated by fixed fees, the City has ensured its capital plans are bankrolled by a captive ratepayer base that can no longer “save” its way to a lower bill.

This budget represents the final move in a strategy to de-risk the City’s finances. It secures municipal income against a changing world of solar power and water conservation, but it does so by turning the basic municipal bill into a series of mandatory, high-priced subscriptions that offer residents very little control over their own cost of living.

GOOD Manifesto on Public Accountability: Calling for accountability from elected officials and public servants.

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