Time is running out for residents in Cape Town
to comment on the amended City budget.
Cape Town Mayor Geordin Hill-Lewis amended the
City’s 2025/26 "Invested in Hope" budget, slashing proposed tariffs
to ease the burden on ratepayers. This comes as residents initially lashed at
the proposed budget tabled in March.
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ARCHIVE: Cape Town Mayor Geordin Hill-Lewis
Hill-Lewis, who tabled the amendments on 28 May
at a special City council meeting, said that these additional measures will
complement the existing wide-ranging relief already contained in this budget
Hill-Lewis says the municipality could not cut
or rephrase the City's infrastructure budget, saying R40bn infrastructure
budget will stay as is.
‘’ Multi-billion rand upgrades to wastewater
works, and to bulk sewers, such as SA’s largest project on the Cape Flats line,
cannot be postponed. Nor can the wide-ranging sewer and water pipe replacement
or pump station upgrades be delayed or slowed, if we are to live in dignified
communities with working infrastructure. We can’t avoid securing new water
sources, and investing in bulk water resources as SA’s only city that directly
owns and manages some of its own dams – this would be criminal for a metro that
knows all too well the fickleness of rainfall, and the consequences of drought.’’
‘’We cannot fail to upgrade our electricity
grid, as a city that knows all about Eskom’s blackouts, and what it will take
to build an energy secure future that protects the economy from job-killing
outages. Our roads, our ability to rely on public transport to get to work
affordably, safely, and reliably – this is all critical infrastructure that we
dare not play dice games with. So we’re investing in road upgrades, in
congestion relief, and in pothole repair. And we know that despite the growing
momentum of our housing programme, the most important way we will break down
the physical and economic exclusion that apartheid baked into our cities, is
through working public transport. So, we are investing there too, in South
Africa’s largest public transport project to connect communities across the
metro’s south-east, from Khayelitsha and Mitchells Plain, to Constantia and
Wynberg, via a new MyCiti bus route. These are just some of the reasons why we
must keep intact our South African-record R40bn infrastructure budget – 75% of
which will directly benefit lower-income households. In fact, this budget
should even be larger,’’ he added.
The Cape Town mayor says the City will pursue
its major safety and cleaning investments. Over 500 new metro police officers will
be deployed, with a dedicated neighbourhood policing allocation to each and
every ward, for the first time ever. In addition, it will deploy over 200
officers to protect frontline service delivery and infrastructure
Hill-Lewis says consumption charges will still
make up the largest portion of revenue, and only a relatively small portion will
be fixed.
‘’So, the incentive and choice to decide your
own consumption pattern remains, with low consumption customers benefitting from
lower per unit costs for water and electricity as part of the step-tariff
system. Cape Town also cannot sustainably fund infrastructure with lower-income
and affluent households making equal contributions. Hundreds of thousands of
households between R500 000 – R1.5m do make meaningful fixed contributions
within their means. But we cannot sustainably run a city where a R50 million
household makes the same fixed contribution to water and sanitation
infrastructure as a R500 000 household.’’
‘’If a flat charge of say R500 is billed, and
one household earns R20 000 while the other earns R100 000 a month, this charge
represents 2,5% and 0,5% of their monthly income respectively. This means the
impact on the lower-income household is actually five times more than on the
higher-income household. Let’s call that what it is - regressive taxation - and
we oppose it for the same reason the DA recently opposed the VAT hike, because
it hits the poor hardest. Cross-subsidising – where the better off among us
help to fund services for the less fortunate – is the only sustainable way to
ensure a working city of hope for all. All households – whether low-income or
affluent – also contribute 15 cents in every rand of rates paid towards free
and basic services to indigent households valued under R500 000.’’
‘’While this budget is designed to protect
households under R2.5m, we have listened carefully to ratepayers in higher
value properties, and do agree that not everyone in higher value homes is
wealthy or cash-flush,’’ said Hill-Lewis.
Executive Mayor of Cape Town, Geordin
Hill-Lewis tabled several tariff reductions, and these include extending the
‘first R450 000 rates-free’ benefit to all homes up to R7 million property
valuation (up from R5m); More pensioners to benefit by raising qualifying
threshold to R27 000 monthly income per household (up from R22 000), regardless
of property value, SA’s widest criteria for pensioner support; Significantly
reducing City-wide Cleaning charges for all residential properties under R20m
compared to the tabled March 2025/26 budget. A pensioner rebate for City-Wide
Cleaning has also been included which will offer up to 100% off this charge; Lower
fixed water charges for property value bands between R1m and R25m compared to
the March tabled budget draft
The above relief measures will lead to lower
total monthly bills compared to the March budget approximately as follows, and
based on average consumption patterns:
o R1.2m home: up to 15% lower
o R2m home: up to 24% lower
o R3m – R4m homes: up to 33% lower
o R5-7m homes: up to 40% lower
According to Hill-Lewis, the relief will be
even greater for pensioner rebate beneficiaries
‘’For instance, getting rid of the former ‘pipe
levy’ based on pipe size, and basing it now on property value, means that all
homes under R2,5m will pay less for their fixed water charges than they would
have on the pipe-size system for 25/26. Even when adding the new sanitation
charge, 200 000 families in homes under R2,5m will pay less fixed charges for
Water and Sanitation together this year, compared to what they would have paid
on the pipe-size system.
‘’This is alongside electricity price relief,
which will benefit households across the property value spectrum. From July,
the per unit electricity charge for customers on the Home User and Domestic
tariffs is going down. This is made possible by discontinuing the 10% cost
embedded in electricity prices that previously paid for city-wide cleaning. We
have further considered the petition by the Cape Town Collective Ratepayers
Association, which calls for the raising of electricity prices instead of a
City-Wide Cleaning Tariff. Our modelling shows this will negatively impact
households, and that it is better to pursue other means of relief.’’
‘’For commercial customers, we have heard the
points raised by major commercial property owners like SAPOA. The City will
allow commercial customers more time to adapt to the phased-introduction of the
City-wide Cleaning Tariff. Therefore, in 25/26 commercial customers in
particular will continue to contribute to funding the city-wide cleaning
service in the way they currently do - via a percentage of their electricity
price.’’
‘’For households on the other hand, the
reduction in the per unit cost of electricity will be especially meaningful for
larger families with high consumption. We know this is the case in many lower
income homes, where one often finds not one, but multiple families staying
together, and so consumption is high. For example, when using 750 electricity
units in a month – and water between 10-30KL - total monthly bills for homes
valued R1m – R3m will decrease by as much as -5%, up to a maximum overall
increase of 3%. Given this positive impact of electricity price relief for
households, it is important to take electricity usage into account for an accurate calculation of your potential total monthly bill increase.’’
PICTURE: CoCT
The City of Cape Town's Lifeline electricity
tariff provides free basic electricity and discounted rates for low-consumption
households. The tariff is designed to help those with limited budgets access
electricity at a lower cost. According to Hill-Lewis, this will continue for
indigent households and pensioners.
‘’Lifeline customers using 600 units will still
pay roughly the same in 2025 as they did three years ago in 2022/23. This is
thanks to the City raising the number of cheaper, subsidised electricity units
that can be bought from 350 to 600 units per month. Speaker, today’s changes
and the existing relief, will ensure that we not only protect households under
R2.5m as this budget was designed to do, but that we also bring meaningful
relief to more homes, with bills lowering by up to 35% compared to the March
budget for households under R7m in value.’’
‘’Following the relief measures we are tabling
today, 97% of ratepayers won’t experience the often-repeated +20% increase in
monthly bills, and virtually no one will experience a 30% increase on any
reasonable household consumption scenario, let alone the fabled 40% of a recent
click-bait report. The 3% of cases where this year’s tariff reforms may lead to
an unusually steep increase of over 20%, relate to homes of high value with
very low electricity and water usage well-below the average household, likely
due to large solar and borehole investments.
‘’These are exactly the customers who the City
encourages to sell us as much of their excess solar power that they can
generate, in exchange for municipal bill credits, and even cash once the total
bill reaches zero. They could reduce
their overall increases significantly, or even lead to paying no bill at all,
if they sold all their excess electricity back to us. We are ready to pay cash
for power.’’
‘’We also understand the additional impact of
tariff reforms on ratepayers who own higher value properties in Eskom-supply
areas. City-wide cleaning is not a new charge for the over 70% of residents
living in City-supply areas, who have for decades been funding cleaning and
other services via a 10% cost embedded in electricity purchases. However, this
is an entirely new charge for Eskom-supply area residents, who in the past have
been subsidised by other ratepayers. It is especially these customers who we have
kept in mind in developing the additional relief measures to soften the impact
of the City-wide cleaning charge,’’ said Cape Town Mayor, Geordin Hill-Lewis.
The public participation on the budget
amendments ends on 13 June and residents can comment online
at capetown.gov.za/HaveYourSay; Email your written comments to Budget.Comments@capetown.gov.za;
Deliver your comments by hand to your nearest Subcouncil office. Alternatively,
for verbal comments, call 0800 212 176.
Done by: Mitchum George
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