Zara Nicholson and Siyavuya Mzantsi
POOR households and businesses will be hit hard by electricity, rates and other tariff increases contained in the city’s draft budget passed yesterday.
Rates will rise by 18 percent over the next three years. Refuse collection charges will rise 5.87 percent this year, 6.07 percent in 2015/2016 and 5.75 percent the following year.
Water will cost 8 percent more from next month, 10.35 percent more in 2015/2016 and 10.92 percent the next year.
Electricity will increase by 7.63 percent next month, 8.50 percent in 2015/2016 and 8.75 percent in 2016/2017.
There would be a strain on middle-income households, said Imraahn Mukaddam, Consumer Fair provincial co-ordinator. “A 7.6 percent increase in electricity in terms of prepaid electricity will work out to a higher percentage increase. It puts an added burden on poor households and disposable income will shrink for lower-income households,”
“Petrol price increases are already crippling households and that, coupled with high electricity costs, is going to make the burden unbearable.”
In Mitchells Plain a family whose monthly utilities bills totalled R900 could expect the amount to reach almost R1 000.
Khayelitsha shop owner Jimmy Vithi said the increases would hurt his business
. “At the moment I pay more than R800 a month in electricity and more than R200 for water to support a family of five, excluding myself. My shop is not that big – it is just to support my family because no one works,” Vithi said. Like most households in Khayelitsha, he did not pay for refuse collection and rates.
Cape Chamber of Commerce president Janine Myburgh said the increases would be a blow for business on the back of news that the economy has shrunk by 0.6 percent in the first three months of this year.
“The average consumer will have less to spend, which will further curb growth in many sectors.
“If we are going to put more money into the average pocket, we must create jobs. To do that, we must create an investment environment which will attract and retain companies who can employ our citizens. We also must ensure that we continue improving services to all our communities, and this requires investment.”
The council has approved a capital budget of R6.2 billion and operating budget of R28.6bn
Utilities (water, electricity, sanitation) will get 50.4 percent of the operational budget. Transport will get 7.8 percent, human settlements 4.3 percent and safety and security 5.7 percent.
From the R6.2bn capital
budget, utility services gets R2.8bn, transport R1.6bn and human settlements R688.1m.
Safety and Security gets R70.5m and health R21.6m.
Mayor Patricia de Lille
said R200m would go towards the city’s urbanisation department for infrastructure in informal settlements.
“In total our service delivery budget would see 67 percent of our spending targeted towards the poor in the city, a powerful testament to this government’s commitment to reconciliation through substantive redress measures,” said De Lille, who outlined how residents would benefit from free basic services.
Residents with properties valued at less than R400 000 or who earn less than R3 500 a month will benefit from free subsidised services and rates rebates. People earning between R3 501 and R4 000 will get a 75 percent rates rebate.
ANC chief whip Xolani Sotashe said: “This budget is simply not pro-poor.” He said contrary to De Lille’s assertion that 67 percent of the budget was spent on the poor, “you will either not find any budget allocation for the poor areas, or a shameful meagre spend for the poor areas”.
Deputy mayor and mayco member for finance Ian Neilson said for five years there had been a slow recovery from a sharp economic downturn, and residents continued to face hardships. Despite this, “our ratepayers and consumers continue to pay their rates and service charges”.