Tariff increases are not justified

MANDLA RADEBE of Norkem Park writes:

I noted with interest a couple of points on the budget presented by MMC Makwakwa last week. Of particular importance were the increases on the following tariffs items:

• 7.5 per cent for assessment rates

• 12.2 per cent for electricity

• 14.5 per cent for water

• 9.5 per cent for sanitation

• 8 per cent for removal of refuse

If one looks at all the tariffs above, they are way above CPI inflation which is currently standing at 4.5 per cent. The majority of economists in the country, including those of the South African Reserve Bank and the Statistics SA, are forecasting the following by the end of the year 2015;

• Inflation to rise to 5.5 per cent

• GDP growth to rise to below 2 per cent (especially given the electricity problems)

The South African economy is driven mainly by those two indicators, which should be used as a guideline in budgeting by metros. The electricity tariff, I can agree with because it is ordered by NERSA, but Rand Water is a parastatal, and therefore it is irresponsible for the both them and metro to justify such an above inflation increase and pass it with a margin to a customer that is already burdened with 1 per cent increase in income tax – all this in a stagnant economy where GDP growth is low and does not even amount to a corresponding job creation.

It was interesting to read the metro’s budget in comparison to Jo’burg City’s, a marginally bigger metro, whose increases seem to range between 0.5 per cent to 1.5 per cent lower than ours.

Both metros have bad increases, but ours is higher and economically unjustifiable.

You cannot spend too much at the time when the economy is down, you have to manage the economy and practice fiscal prudence. Are we undertaking projects that are bigger than we can afford, why?

What the city is doing, is what the whole country has always been doing for a long time, which is letting the problems grow and then throw money at them.

I have noted also that the MMC for finance is pointing out that there is underspending, but it is shocking that he wants to punish that.

Money is allocated for expenditure, but should we spend at all cost?

Don’t we have ways of understanding why money has not been spent and maybe budget lower for the same projects on the next financial year, than punish? This could be the reason why this metro was alleged to have employed someone who was receiving a salary for more than a year without a clear job description.

The metro is also under-collecting, according to MMC Moses Mkwakwa, by a percentage he won’t disclose, but he is committed to 93 per cent target collection of tariffs for the next financial year.

Is the seven per cent he is committing never to collect, paid for by the increases he is charging against the paying population of ratepayers?

I think that is insensitive and unfair. Though the metro has received an unqualified audit, which is good and congratulations, we, the ratepayers, are still by large, appallingly and poorly serviced by the metro.

The staff has increased and there were more appointments, including the political ones announced recently, but the service we get does not even justify even half the cost we pay.

The MMC and the mayor may not care what my views are and proceed to implement these increases, but the fact is, either the metro is economically uninformed or disregard indicators, or they don’t care as long as they have the law on their side.