Cape Town - Whichever way it’s sold, Cape Town residents are going to pay more when they turn on a tap or flip a switch.
During on Wednesday’s budget meeting – where the City of Cape Town’s budget for the 2014/15 financial year was disclosed – it emerged that rates and utilities would become significantly more expensive.
And the projection for the future is not looking good, with more increases in the pipeline over the next three years.
While rates and refuse costs are in line with inflation, which is currently at 6.1 percent (as of April), waste disposal, water, sanitation and electricity have increased by 8.56 percent, 8 percent, 8 percent and 7.63 percent respectively.
When the figures were announced in the council chamber, there was an outcry from opposition parties. Many seemed taken by surprise, despite the figures being part of the draft budget since early February.
“Cape Town is becoming an unaffordable city to live in,” said ACDP councillor Grant Haskin. “We echo previous calls that there should be a zero percent increase in rates.”
He said the increasing rates were just a form of exclusion. His opinion was shared by PAC councillor Anwar Adams, who said: “It would only be decent to repay those voters (who kept the DA in power) with a zero percent increase.”
But deputy mayor Ian Nielson responded that the city’s tabled operating budget of R28.6 billion would not be possible without the increase in rates since it was primarily financed from rates and tariffs.
If rates remained stagnant, the city would have to cut back significantly on its spending to catch up with a 30-year backlog of infrastructural issues that it “inherited” from the previous governments, as well as taking on new issues created by the metro’s rapidly expanding population.
Neilson said much of the pressure on the current infrastructure would be alleviated by 2017, although exponential increases in population would result in extra pressure in other areas, such as Atlantis.
The operating budget for the 2014/15 financial year will be spread across a variety of sectors, but over R14 billion will go towards maintaining and improving utility services.
About R1.7bn will go towards corporate services, a further R1.43bn to community services, R2.2bn to transport (which includes the MyCiTi bus network), R1.2bn on human settlements and R1.63bn towards safety and security.
For capital expenditure, R6.2bn has been set aside and will go towards funding new projects, initiatives and structures.
Mayoral committee member for safety and security JP Smith has a big budget at his disposal – one which he asked for repeatedly in the build-up to the tabling of the draft budget.
He said most of his budget would go towards equipping staff and bringing in more officers to bolster operations in the city.
“The budget prioritises the basics. We are ensuring that the staff have the basic equipment to do their job – vehicles and radios – which is why the budget invests heavily in a steady vehicle and radio replacement programme,” he said.
About R4.3m will be invested into the CCTV camera roll-out in Bellville and Athlone while funds will also be pumped into neighbourhood watch groups.
Mayoral committee member for transport Brett Herron will use a sizeable portion of his budget to continue development of the MyCiTi bus network. About R25 million has been allocated to finish the construction needed to support new N2 routes, which will connect Khayelitsha and Mitchells Plain to the city centre.
“The first two routes are due to commence on July 5 this year.”
More will be invested into the service’s second phase, which will fill in the missing links, namely connecting the Southern Suburbs, the Cape Flats and the city centre.
Mayoral committee member for tourism, events and marketing Garreth Bloor said much of his capital expenditure would be focused on creating jobs but would also reduce the impact of seasonality on the tourism sector. However, his operational budget will be weighed down by Cape Town Stadium, which still stands largely dormant, intermittently hosting live acts from overseas.
Last year it was revealed that the stadium’s operating costs amounted to R436 million since construction. Bloor’s budget for the next financial year is only R486m.
Mayoral committee member for utility services Ernest Sonnenberg said utility services – of which the majority of the operational budget would be spent on water and sanitation – played a vital role in addressing the imbalances of the past.
It formed a part of a bigger argument made by the city, that its budget was skewed towards the poor.
When the mayor Patricia de Lille started the meeting she challenged the ANC to provide proof that the city’s spending had been anything other than pro-poor.
“In my years as mayor, not once has any substantive proof to counter our evidence of pro-poor spending ever been offered.”
Among the projects budgeted for the next financial year are several that will be rolled out in poorer areas.
These include a R61m investment in the Khayelitsha/Mitchells Plain Mesh Network – a project that aims to put the townships online using a map of wireless routers, a further R34m for land acquisition, and R18m into the Valhalla Park housing project, to name a few.
Other capital spending included council rental stock upgrades, the second phase of the Garden Cities project, and the Macassar and Gugulethu housing projects.
It was not enough to convince ANC councillor Xolani Satashe. Last year his party accused the DA of skewing the budget in favour of wealthier areas, and this year he picked up on what De Lille branded as the ANC’s “myth”.
“This budget is simply not pro-poor,” he said to a chorus of boos.
He said only R20m had been set aside for sanitation, which Sonnenberg countered by saying that many of the sanitation projects formed part of the Human Settlements budget.
Cape Chamber of Commerce president Janine Myburgh said the increased rates would be a blow for business.
“Especially as it comes on the back of today’s news that South Africa’s economy has shrunk by 0.6 percent in the first three months of this year.”
She added the average consumer would have less to spend, which would further curb growth in many sectors.