Independent Online

Monday, August 8, 2022

Like us on FacebookFollow us on TwitterView weather by locationView market indicators

Hard times ahead as prices, tariffs spiral

More price hikes for South Africans already feeling the pinch as salaries remain the same. Image by Ayanda Ndamane/African News Agency.

More price hikes for South Africans already feeling the pinch as salaries remain the same. Image by Ayanda Ndamane/African News Agency.

Published Jul 3, 2022


Durban - KZN FAMILIES are in for more hard times when yet another fuel price increase kicks in on Wednesday, and municipal tariffs rise steeply in the next utility services bill.

eThekwini residents will be paying an additional 5.9% for household water, while businesses will pay 9% more. Electricity has gone up by 8.61%, and sanitation by 5.9% for homes and 9% for businesses. Refuse removal will cost 4.5% more for domestic use and 7.9% for business.

Story continues below Advertisement

In Msunduzi, property rates have gone up by 8% and electricity by 7.4%, while refuse removal will cost 5.8% more.

Sanitation has increased by 9% and water by 6%. Ratepayers’ associations in both municipalities have slated the increases. Jay Govender of the Tongaat Ratepayers’ Association said the hikes were inconsiderate as they came when communities were in anguish and stress, recovering from a national disaster.

“It is very clear that the people who motivated for such increases did not take into consideration the current situation, emotional trauma and inability to survive.

The government has no business to make any increases or impose any further trauma on its people because they failed in providing the community with the services that they are paying for,” she said.

“As ratepayers, we are looking at different avenues to withhold our rates and are considering all the legalities because they do not deserve the rates, and these are facts.” Navin Dookran, chairperson of the Clare Estate Ratepayers’ Association, said that public participation was vital in decision-making and that at least six months was required to give the public an opportunity to adjust to these increments.

“Everything is going up except for salaries. I do not think there should be any increases until at least the next three or four years.

Story continues below Advertisement

Government has emergency funding and the country has enough money to run on its own independently. I do not understand why eThekwini is raising prices when service delivery is so poor.” Anthony Waldhausen, chairperson of the Msunduzi Association of Residents, Ratepayers and Civics echoed Govender and Dookran’s sentiments, rejecting the tariff increases and calling for a review. “

We believe that the municipality is not prioritising the needs of residents and is opting to focus on irregular and wasteful expenditure. It is against these realities that the municipality needs to ensure tariffs are not increased, but are decreased,” said Waldhausen.

“The current economic situation points to sound reasons for the development of creative ways to mitigate any further negative impacts upon the livelihoods of residents, ratepayers and the communities that the civic associations represent within Msunduzi.”

Story continues below Advertisement

Waldhausen argued that municipal service tariffs were not in accordance with the Municipal Finance Management Act, which prescribes that tariff increases must not be higher than 4% to 5%.

Therefore the mayor, the municipal manager and chief financial officer were obliged to provide reasons why the increases exceeded 5%. The petrol price was expected to increase by around R2.50 a litre.

Wayne Duvenage, chief executive of the Organisation Undoing Tax Abuse (Outa), said that with the pending increase, it would be advisable for the minister of finance to consider extending the fuel levy reprieve.

Story continues below Advertisement

“Petrol is extremely expensive and impacts inflation and commuter pricing, and we need to see a longer-term solution. But for now, a short-term solution is the only space in which the government can provide a reprieve, and that is in the fuel levy.”

Economist Christie Viljoen said high-earning families were spending around 30% of their budget on food and transport, while low-income families spent at least 50%.

“During times of elevated food and energy inflation, spending substitution needs to take place in order to allocate a larger proportion of the budget to food, transport and electricity,” she said. “Low-income households will need to sacrifice spending on healthcare or clothing to afford more expensive food and energy products,” Viljoen said.

Economist Azar Jammine said that while the increments in fuel prices were beyond government’s control, municipalities controlled the rates of their services. Jammine said tariff increments were not justifiable in totality.

“In some instances, the increases are justifiable because the water and electricity distributors have to bear a certain cost, including that of labour, but what we have seen in most instances is that the rates are raised by more than just inflation.”