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Shock 30% rates increase for Nelson Mandela Bay over the next three years

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Dear MyPE

The current uncaring Nelson Mandela Bay leadership is planning to milk consumers, who are currently under huge financial stress due to the Coronavirus outbreak and subsequent lockdown, with a drastic 30,3% rates increase budgeted for over the next three years.

The proposed rates increase for this upcoming 2020/2021 financial year, would see residents paying close to double the current rate of inflation, which could lead to a catastrophic economic collapse during a time when the economy is being laid low by the Covid-19 pandemic.

The Municipality is proposing the following tariff increases in the 2020/2021 financial year draft budget:

  • Rates – 8.5%
  • Water – 8%
  • Sanitation – 8%
  • Refuse – 8%
  • Electricity – 6.22%

These exorbitant and unrealistic rates and tariff increases make a mockery of the economic relief plans by the provincial and national government, to mitigate the economic impact of the Covid-19 pandemic.

The rates increase for the following two years are proposed at 9.5% in the 2021/22 financial year and 9.6% in 2022/2023 financial year. This equates to a whopping 30.3% increase in property rates accounts over the three-year Medium Term Revenue and Expenditure Framework (MTREF).

National governments’ targeted Consumer Price Index (CPI) band is between 3-6% while the South African Reserve Bank (SARB) states inflation will be at an average 4.7% in 2020. These proposed tariff increases are, therefore, unrealistic given the economic state of the country.

The fact that the tariffs for water, sanitation, and refuse are all budgeted to increase by 8% highlights that the Metro came up with these increases to balance the budget. These tariff increases are not cost reflective.

The DA makes the following proposals with regards to tariff increases:

  • Any rates increase, if any, must stay within the CPI band,
  • Water and electricity tariff increase must be equal to the increase in the cost of bulk services
  • Any increase, if any, to the refuse and sanitation tariffs must stay within the CPI band increase

The municipal leadership must rather look at where they can cut costs on non-core expenditure, and improve efficiencies within the various departments, rather than going to the overburdened residents to bail the municipality out with ridiculous increases just to balance the books.
This is certainly not the year where ratepayers and consumers must be forced to fund municipal inefficiencies and wastage

These increases are short-sighted in the extreme and place further strain on the residents of Nelson Mandela Bay at a time when they can ill afford it. These unrealistic rates and service increases place a stranglehold on our city’s economy, killing off any chance of economic recovery and push our city one step closer to collapse.

Regards

Cllr Nqaba Bhanga
DA EC Provincial Leader

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