Statement: eThekwini Municipality must rethink its decision to implement tariff increase!
Yesterday marked exactly a month since R2K in KZN wrote an open letter to the eThekwini Municipality to challenge the municipality’s decision that those in arrears with utility bills would face disconnections from July 2020.
The campaign believes that the municipality is burdening consumers with unreasonable tariff increases while Councillors are burdening the municipality with their own salary increases.
In this difficult period for Governments, Central or Federal including municipalities it is obvious that the effects of the pandemic will not only be felt by consumers but also state institutions and other spheres of Governments. At the beginning of the lockdown the eThekwini Municipality took prudent decisions to mitigate the effect of the pandemic. Those decisions included:
- Assisting vulnerable communities with food parcels.
- Relief for rates and services
This was a good initiative by our municipality and must be commended to have taken up such noble ideas. However, media reports surfaced in May that the municipality was on the verge of financial collapse. It was reported that the municipality collection rate for April was 56%. The report is alleged to have been compiled by the City revenue department. It was further reported that the municipality was contemplating disconnection of services as a means to improve collection as it was unsure when the lockdown would end.
It was later reported that the “the Municipality considered the fact that some customers were going to struggle with the payment of rates and services, and decided to assist with the Covid-19 lockdown relief scheme”. It is true that our economy has been in technical recession and even before lockdown and recently downgraded by Moodys. All these factors will have an impact on the consumers and will translate into less revenue than expected to the municipality.
In an article by CFO Krish Kumar in Esi Africa Journal titled “Finance structures within municipalities: a guide to revenue loss recovery” it stated that funding sources of 2015/2016 Municipal sources of revenue were property rates 14%, service charges 46.1%, transfers and subsidies 30% and other revenue 9.9%. The services charges which make up the bulk of the revenue at 46% include electricity, water, sewerage and refuse rates. The report shows the importance of the rates and services to the municipality.
In Antoine de Saint –exupery’s Classic a story of authority, public obedience is narrated, the King opined that “authority rests first of all on reason. If you command your subjects to go and throw themselves into the sea, there will be revolution. I have a right to demand obedience because my orders are reasonable” the question then is, can our municipality demand obedience in respect of the recent Councillors salary and tariffs increases in the 20/21 budget?
The understanding was that with the municipality having acknowledged that revenue will be down due to consumers being strained financially, the issue of salary increases will be the last thing in the Council’s minds. The Treasury and Minister of Public Service implemented salary cuts instead of increases, no salary increases were given to the public sector employees despite the existing agreement. It may be legally correct based on section 43, 156 and 160(2)(b) of the Constitution. However, it is expected for politicians to lead by example. The decision to increase Councillors salaries may pass the constitutional muster. As the Right2Know we doubt if it can pass the Court of public opinion.
The public elected Councillors as their representatives, we say that cautious being aware that others are political appointees. They did so with the hope and believe that Councillors will always act in their best interests, however, in their decision to increase their own salaries, they did not act in the public’s best interests. It seems as if the Councillors acted on their own interests than for the interest of the communities they represent. We want to appeal to their conscience as public representatives cross political parties to reverse this decision.
While this appeal is based on their conscience not illegality, the question that the Councillors must ask themselves is, irrespective of who voted for what, is whether this decision was a correct moral decision? Will history judge them correctly, they might say yes, we have a right to the increases, have they ever thought about that man and woman trying to ink out a living in this economic difficult condition in the inner City. If not, think about them. If yes, re-think about them.
Lastly, we all understand that the municipality needs revenue and part of getting revenue is to implement tariff increases, but based on current conditions an increase cannot be implemented if it will be unaffordable. No cost cutting measures have been implemented or announced by the municipality as yet. Despite the fact that they are aware that revenue will be down. Instead the municipality is burdening consumers with unreasonable tariff increases and Councillors are burdening the municipality with their own salary increases. The decision is unaffordable and must be reviewed and rescinded. The 6 Billion returned to the National Government as contribution in Covid-19 relief is all good, but the rot will not start at the head but the tail.
For more information contact:
Sithembiso Khuluse, R2K KZN Provincial Organiser: 081 575 3832
Burton Jaganathan, R2K KZN Provincial Coordinator: 076 215 4223
