GOOD Statement by Anton Louw, GOOD City of Cape Town Councillor:
Cape Town residents, already buckling under rising living costs and unaffordable municipal tariffs, could soon see a once-off debt remission as the City considers writing off R2.2 billion in what it calls “irrecoverable” debt. While this may seem like relief on the surface, it exposes deeper issues in the City’s financial planning and governance.
The City’s failure to collect these debts stems largely from its own unaffordable tariff increases since 2021, the same year Mayor Geordin Hill-Lewis took office. Since his appointment, the City’s capital budget has nearly tripled, even though it consistently fails to spend that budget. To fund this bloated capital expenditure, the City has implemented year-on-year tariff increases well above inflation, forcing compliant ratepayers to carry the burden for failed revenue collection and financial overreach.
Despite repeatedly touting its budget as “pro-poor”, the City’s actions speak otherwise. The proposed write-off disproportionately benefits property owners, including those with homes valued up to R7 million.
Under the proposal:
- Residential properties valued above R450,000 up to R2.5 million would get a 100% once-off write-off on arrears.
- Properties valued between R2.5 million and R7 million would get a 50% write-off on debt older than one financial year.
The City claims that economic stagnation since COVID-19 has impacted its debt book, now ballooning to nearly R10 billion. But instead of acknowledging the consequences of its own excessive tariff hikes, it continues to shift blame onto external factors.
The Mayoral committee member for finance added that the write-off incentive aimed to create a culture of payment, while opposite is actually the reality. When the City introduce an incentive like this, residents will in future not pay because they believe the city will do a write off again.
The City received over 14,000 submissions during its draft 2025/26 budget public participation process, with many residents pleading for tariff relief. Instead of reducing tariffs, the City is now writing off billions, money that could have been used to alleviate cost pressures for everyone.
Electricity prices are a prime example. The City has consistently cited Eskom’s tariff hikes, yet it illegally increased electricity prices above NERSA guidelines for the 2022/23 and 2023/24 financial years and is now using ratepayers’ money to fight these increases in court.
This is not sound governance. It is election-year accounting.
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