There is outrage over the proposed salary increases for councillors and the increases in municipal tariffs with the country facing an economic crisis due to the coronavirus outbreak.

Municipalities are finalising their budgets for the new financial year 2020/2021 which comes into effect from the 1 July. This could mean rate increases despite many ratepayers not being able to pay for their municipal services after the national lockdown saw companies close and some workers receiving reduced salaries and in some instances no salary at all.

Proposed salary and tariff hikes

South Africa’s largest and richest metro municipality, City of Johannesburg, has released its Draft Medium-Term Budget 2020/2023 for input on proposed tariffs and salary increases.

Among others, it proposes a 4.9% increase in property rates for the new financial year, a 5.4% hike in employees-related costs, and councillor remuneration of 6.4%.

The draft budget sets proposed tariff increases of between 5% and 8% for electricity, water, sanitation, and waste removal.

City of Johannesburg Spokesperson Nthatisi Modingoane says unfortunately municipalities must continue to operate and provide services.

“But municipalities cannot close down because there’s COVID. Municipalities must find ways with the little resource to continue to operate.”

He says tariff hikes are a legislated annual process.

“It is not the first time that tariffs are adjusted. They are adjusted every year, to respond to current situations as they are. So, people must just work with us so that we come up with adjustments that will not be detrimental to residents of Johannesburg, but also sustain the municipality to be able to provide services going forward.”

Resistance over proposed increases

However, the Organisation Undoing Tax Abuse (OUTA) thinks it is ridiculous for municipalities to be hiking tariffs and salaries when the country is in the throes of an economic meltdown due to the impact of the coronavirus.

“(It is ridiculous) To give salary increases while in the private sector people are losing their jobs and salaries are being cut, certainly no bonuses are going to be forthcoming this year. The local government carries on as if it’s business as usual. This is absurd and we cannot allow this to happen. So, we have written to the Minister of Cogta, Minister Nkosazana Dlamini-Zuma, to request a moratorium on this matter, right through to the provincial MEC’s, to halt this salary increase requests by municipalities because they are going to lead to increases in tariffs, property tariffs, levies and so forth, that the public will have to pick and we cannot afford it. We are in a crisis as a country,” says Outa’s Wayne Duvenage.

‘Keep paying’

Gauteng Finance MEC Nomantu Nkomo-Ralehoko says her department has been working to assist municipalities to table their funded budgets for the 2020/21 financial year and also collect revenue. She says Gauteng municipalities have not been able to collect R5 billion in revenue since the start of the national lockdown. However, she says it is important for those customers who can afford to pay for services to continue paying.

“It is a difficult task indeed because everyone does not have money. Even those who have money, they were not paying the municipalities. Let’s make sure that even if we review their budgets, at the same time let’s allow and plead with those that can pay, at least, to assist municipalities and pay a little amount of money that they have.”

Nkomo-Ralehoko says the Gauteng government and its various departments that owe municipalities for rates and taxes are being encouraged to service their debt to avoid collapsing the municipalities.

“We have paid, as we speak, an amount of R2 billion for the 2019/2020 financial year, as we speak and we still owe them less than 1% of this total outstanding debt.”

The National Co-operative Government Department and the South African Local Government Association (Salga) were not available for comment at the time of broadcast.