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2017-2018 BUDGET: City keeps tariff hikes to ‘a bare minimum’

24 May 2017

 

Although tariff increases are imperative if the City of Johannesburg is to provide sustainable service delivery to all its residents – especially in poor communities – Member of the Mayoral for Finance Cllr Rabelani Dagada kept them to “a bare minimum” when he tabled his R55.9-billion 2017-2018 Budget at Metro Centre in Braamfontein on Tuesday May 23.

 

MMC Dagada said to address the enormous service delivery backlogs facing the City and to meet the demands of residents in the 2017-2018 financial year, it was critical that tariff increases be effected. About 84.7% of the City’s Budget is dependent on the revenue it raises.

“We must look to our own efficiencies as a City and our own efforts to optimise in order to raise the revenue to meet the demands of change while protecting our residents, who suffer daily under the high cost of living,” said Cllr Dagada.

He said the 2017-2018 tariffs would allow for sustainable service delivery. MMC Dagada said property rates would increase by 6.2%, which was within the Reserve Bank’s inflation target range.

Following a review of the Property Rates Policy, rebates offered by the City include:

  • The first R200 000 of the value of all residential properties will be exempted from rating;

  • A 5% rebate for residential sectional titles;

  • A 100% rebate for pensioner owners whose gross monthly household income is lower than R8 745 with a property value of not more than R2-million;

  • A 50% rebate for pensioner owners whose gross monthly income is higher than R8 745 but lower than R14,991 with a property value of not more than R2-million; and

  • The business-to-residential ratio remains at 2.6 to 1.

  • Other rebates under the new amendments include:

  • A 100% rebate for pensioner owners aged 70 or older, irrespective of income, with a property value of not more than R2-million;

  • A 100% rebate for child-headed households with a property value not exceeding R2-million;

  • A 100% rebate for Extended Social Package pensioners who live in a property valued at not more than R2 million; and

  • A 100% rebate for people on the Extended Social Package who are not pensioners and whose property value does not exceed R450 000.

Electricity tariffs will increase by an average of 2.28%. The City will continue to apply step tariffs, which will see high-consuming customers being charged higher tariffs. Water, sewerage and sanitation services tariffs will increase by an average of 12.2%.

“We have recently emerged from a severe drought and studies indicate that our supply of water will continue to be under serious threat. In response to this, the proposed tariff structure for water, sewerage and sanitation services emphasises the importance of water as a scarce resource and aims to create a culture of water conservation. High consumers of these services will continue to pay at a higher rate,” Cllr Dagada said.

Free basic water will now be provided to only those on the City’s indigent list. Depending on household income, the City’s poorest residents will receive between 10 and 15 kilolitres of free water per household per month, which is above the national recommendation of six kilolitres.

He said the decision to no longer provide free basic water to all residents and only to registered indigent residents was in line with the National Water Policy and as recommended by the National Treasury.  

“Given the scarcity of water in Johannesburg, the huge inequality in our city and the massive infrastructure and service delivery backlogs, we believe it is in the best interests of our residents to follow this national trend. Domestic users who do not qualify as indigents will see an increase of R42.84 per month to their water bill as a result of this change,” said Cllr Dagada.

He said through this amendment the City would now be able to generate an additional R320 million annually.

“It will help to bring water and electricity services to communities that have never had them before. This City could not have been historically pro-poor when it offered the same amount of free water to households in Saxonwold as they did to families in Alexandra. The new administration is unapologetically pro-poor,” MMC Dagada said.

Waste removal services tariffs will see Pikitup charging a levy based on the value of an individual’s property, with the average refuse tariff estimated to increase by 6.2%

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