Cape Town’s tariffs are at the expense of the working and middle classes

The DA-run Cape Town council has set tariffs and basic charges, not necessarily according to usage as the common criteria across local government, but on a R1-million property value threshold for electricity and water pipe connection size for water. And the DA-run city has invoked drought-related water restrictions to escalate water tariffs from R4 per kilolitre up to six kilolitres a month in January, to R26.25 in February and R28.90 from July.

But not setting usage as the dominant criterion is regressive. It’s set to punish working and middle class families in homes in, say, Salt River, Bo-Kaap and Maitland whose values are rapidly escalating – more often than not well over the R1-million property value threshold – due to the supercharged Cape Town property market, gentrification and construction boom induced by the city’s pro-developer tendencies.

The two basic charges in effect from July are the R150 monthly fixed home user electricity fee for Capetonians living in homes worth more than R1-million – regardless whether that’s R1.05-million, R5-million, R15-million or R25-million – and the water basic charge for which the DA-run city says 95% of Capetonians will pay at most R115.

This water charge is not based on property value, but water pipe connection size. So, a property owner of a R15-million mansion on the Atlantic Seaboard, or leafy Constantia, pays R115 a month on a 20mm connection, as will the owner of a home in working-class Salt River, Bo-Kaap and Maitland or in middle-class Westridge, Mitchells Plain, on the Cape Flats.

The impact of this charge is proportionately heavier for working and middle-class residents on a limited household income of, say, around R10,000 to R15,000 a month than on someone with enough wealth, possibly even in Euros, US dollars or British pounds, to secure one of those multimillion-rand luxury homes.

The council acknowledges the R150 electricity charge for all properties valued from R1-million upwards will hit low-end consumers, but bizarrely argues the change is needed for fairness.

“If you currently use more than 600 kWh (or units) per month on average, you will see no financial impact resulting from the move,” say the official City documents.

“Those that buy less receive a subsidised amount for their electricity. We do not think that this is fair or sustainable, especially if these customers live in high-value properties and are not financially vulnerable.”

It’s unclear who the DA city administration would regard as “vulnerable”, if not working and middle-class consumers struggling following April’s VAT hike, the petrol price hikes and rising food and other costs for whom DA leader Mmusi Maimane recently took up the cudgel. Of course, Maimane blamed the ANC:

“The cost of living for ordinary South Africans has spiralled out of control under President Cyril Ramaphosa’s ANC national government.”

But in Cape Town, the two new fixed basic water and electricity levies mean an additional R265 cost for most – before even a drop comes out of the tap or a single electricity unit lights up a lamp. Never mind the impact of higher tariffs and rates. For many working and middle-class families that R265 easily amounts to a municipal bill hike of between 20% to 40%, a quick rule of thumb survey and rough calculations show.

This comes as the DA-run city is effectively penalising those saving water as tariff increases proportionately hit those using less than six kilo litres a month harder – five months after the tariffs per kilolitre increased by around 700% from R4 to R26.25.

Coincidentally, other DA-led councils like Johannesburg, Tshwane or Nelson Mandela Bay charge step up tariffs according to usage that are also comparatively cheaper at per unit cost by up to half than what Cape Town charges. And regarding water tariffs that also increase according to use, Tshwane charges R1.05 per kilo litre up to six kilo litres and Johannesburg R8.35 for the same unit consumption level.

But the Cape Town city council has argued it has had no choice. Like savings on electricity after years of significantly above-inflation increases, savings due to the more recent water restrictions have deprived council of such secure income. This now must be remedied by tariff increases and the new basic charges, according to city documents, which also dangle the illusion that, as dams are filling up, the “water restrictions and costs may be reduced accordingly”.

Of course, that’s sophistry of the worst type. Remember: the council did its planning and budgeting on these water tariffs; any reduction of these tariffs will effect its revenue, which needed boosting due to reduced income as a result of savings related to the restrictions, which are for the council to impose or lift.

The whole hype around Day Zero, which Maimane took charge of amid the political machinations against Cape Town Mayor Patricia de Lille, basically has come back to bite residents going all out to limit water consumption to 50 litres per person a day.

In a twist of political irony from this political fracas – the dust still has to settle as De Lille remains put – the DA has now introduced the water “fixed basic charge” some six months after the party in council voted down De Lille’s proposed temporary “drought charge” of a maximum of R75 because it was an example of her defiance of the party. Go figure.

Perhaps it’s the DA’s internecine battles and much frustrated push to get rid of De Lille that has put it into such political oblivion and tone deafness.

That 87% of the water tariffs go to maintenance and a mere 13% are earmarked for what the council calls “new water programmes” is outrageous. It means Capetonians languishing in under-serviced, ignored townships across the Cape Flats will continue to be ignored and kept waiting. That is unacceptable.

In Cape Town’s super-charged property market, it’s profoundly unfair and unjust to lump those owning R1-million properties in the same category as the owners of R5-million, R15-million and R25-million properties.

Arguing, as the council does in its tariff documents, that providing services costs the same regardless of area is a technicist argument that is politically tone deaf to the socio-economic realities and legislative and constitutional transformatory imperatives.

Perhaps it’s the arrogance that comes with having been in power for 11 years. But the sins of incumbency, as it’s called, are costing Cape Town – never mind the sophistry and technicist arguments to explain away the need to give even the smallest nod to social justice. DM