Soaring rates in big metros

money Soaring rates in big metros

Residents struggle to break even as monthly expenses grow.

Bad news for ratepayers in Pretoria and East London: you’re paying more for municipal services than your counterparts in other metros.

Parliament heard this week how the screws are tightening for ratepayers in South Africa’s nine largest cities.

The economic downturn, climate change and sociopolitical instability have put unforeseen pressure on cities where government subsidies are not keeping pace.

The SA Cities Network revealed this precarious state of affairs in Parliament on Wednesday with its latest financial report on the eight metropolitan municipalities and ­Pietermaritzburg as the ninth­largest city.

For a basic service package ­(water, electricity, rates, sewerage, refuse removal and roads), the Tshwane and Buffalo City metros charge nearly one-fifth of a household’s monthly income.

Although Tshwane residents have the highest average household income (R19 173) of the nine cities, Buffalo City’s is the lowest (R10 300), and households there have to battle harder to survive.

Sithole Mbanga, chief executive of the SA Cities Network, said the financial report indicated that services in cities were becoming increasingly unaffordable.

“The economy is not growing enough – people have less money in their pockets and even businesses are starting to complain about basic service delivery,” he said.

But more people are moving to the cities, increasing the demand for service delivery. Meanwhile, household debt is rising and ­“services are becoming more ­unaffordable”.

Mbanga said if the situation continued like this, cities would degenerate into “centres of poverty” because municipalities receive too little money from the government.

“How are we still supposed to ­finance our noble ideals, like the green economy and a reduction of gas emissions? We are stuck between the devil and the deep blue sea,” he said.

Ian Neilson, deputy mayor of Cape Town and an SA Cities Network board member, said half of the country’s 52 million people live and work in cities. He said Cape Town’s population alone increased by 30% over the past 10 years.

Cape Town collects R20 billion in service fees and receives R4 billion in subsidies from the national ­government.

Meanwhile, Cape Town’s economy generates R100 billion annually, “of which we don’t see much”, ­Neilson said.

He said the national government should transfer its focus from rural development to the needs of urbanisation.

“We don’t need small housing boxes at the edges of cities, but higher blocks of flats in our cities,” he said.

Subesh Pillay, a member of the mayor’s committee for economic development in Tshwane, said cities must eliminate management problems such as poor audits and corruption so that the focus shifts to economic prosperity instead.

“However, the problem is that even if we do everything right, we still have a financing gap. We must increase our revenue base, but then we will have to expand our infrastructure, especially where there are economic opportunities,” he said.

Soaring rates in big metros

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