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Monday Jul 13, 2020

Joburg defends property tariff hikes

The City of Joburg has defended the steep tariff hikes in its R68.1 billion budget as "balanced" despite objections from opposition parties.

On Thursday, during a virtual sitting to finally table its budget and other revenue-raising measures nine days after the start of the 2020/21 financial year, Jolidee Matongo, mayco member for finance, said the tariff increases considered the impact on the local economy, businesses and residents.

Of the R68.1bn budget, R60.6bn will be for operations and R7.5bn for capital expenditure projects.

Staff and councillors' salaries, which account for a cumulative 26.7% of the city's expenditure, will rise by an expected 6.25% until the 2022/23 fiscal year.

Electricity will increase by 6.23% in this financial year, reaching an expected staggering increase of 10% by 2022/23; water and sanitation will both be up by 6.6% and peak at 8.6% in 2022/23; refuse rises by 5.2% and will be 5% in 2022/23; and property rates rise by 4% to peak at 4.5% in two years.

These revenue-generating measures, among others, account for R45.6bn of the city's R60.7bn revenue budget, with electricity accounting for R16.9bn, up 4.9% from the previous year.

"The increase is based on a proposed average tariff increase for electricity of 6.23%; the strategic drive to reduce total electricity losses to a level of 25.5% in the 2020/21 financial year.

"The average bulk purchase price increase from City Power's main suppliers (Eskom, Kelvin and Ekurhuleni municipality) is assumed at 6.85%," reads an official document adopted by council yesterday.

The city defended the hikes, saying that there was a rise in demand "on limited and fast-depleting resources", adding that it had to ensure "sufficient revenue for service delivery".

"As the economic hub of the country, our tall order has been to urgently explore ways in which we can offer relief to the people of Joburg.

"The tariffsÂ… demonstrate our commitment to inclusivity and accountability to residents of Joburg," Matongo said.
He added that the pensioner income qualifying criteria had increased by 6%.

"This means a pensioner with a property value of below R2.5 million and an income of below R10 338 for the lower limit or below R17 719 for the upper limit, will receive a 100% rebate on their rates. This effectively means an increased number of pensioners will now qualify for the city's rebates," Matongo enthused.

Of the 11 political parties represented in the Joburg council, only the EFF did not support the tabled budget and tariff increases, with councillor Lydia Ledwaba leading the charge for the red berets.

"The proposed 6.23% electricity increase and 6.6% for water is like spitting in the face of the working class and poor," she said.

Speaking on behalf of the DA, councillor CG Santana said that, although the party would have wanted a zero-tariff increase across the board, "it would be irresponsible to leave the city with a deficit".

The DA supported the budget and tariff increases. Santana said the salary hikes for councillors were concerning and called on parties "to show leadership" and forgo their pay increments.

Khaya Khoko
The Star Early Edition
10 Jul 2020




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