Deadline looms to comment on CoCT's amended budget

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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.

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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