Tuesday, 04 September 2012

Durbanites pay the highest rates in South Africa

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Since the increase on 1 July 2012 Durban has the dubious honour of being the highest rated city in the South Africa. Yes it is true, although Durbanites earn less money than ratepayers in either Johannesburg or Cape Town we have the privilege of paying higher rates.

Not only are our rates higher but there is not a comparable difference in what we pay for services. According to the National Treasury survey of "the affordable income group"; Johannesburg residents were paying R1,180.48 on average a month, in Durban it was R1 179.40 for an average household bill per month, and in Cape Town, this was R1 329.89 a month.

The breakdown of the residential rates randages are as follows; Durbanites pay R0.00914, Cape Town pays R0.005613 And Johannesburg ratepayers pay R0.004. There is an enormous difference between those three Metro's and there is absolutely no reason that there should be.

It is apparent, after reviewing the service charges and the rates randages, why we cannot increase our rates base here in eThekwini, who in their right mind would willingly move from where it is cheaper to live and do business to pay more in eThekwini. Cape Town has approximately just a little more than 1 million rateable properties, Johannesburg has approximately 950,000 and here in eThekwini we have the lowest which is 509,380.

Only 10.6% of eligible residents in eThekwini are ratepayers, this fact is deflected by officials by referring to their 95% collection rate. That collection rate is only 95% of the 10.6% that pay rates. And how can they have a 95% collection rate when R1.9 billion is owed by business and residential ratepayers.

The city management needs to wake up and realize that it is a vicious circle, every time rates and service fees are increased we lose more ratepayers making it necessary to increase them once again to make up the shortfall.

Many businesses have had their rates bill doubled and some have even increased by 500%, how does a business absorb that increase? Obviously they cannot so one of three things will happen either the business has to close, retrench workers or increase prices. None of those scenarios are desirable. As it is we have an exodus of businesses leaving the Municipality and every business that leaves takes with it jobs and ratepayers.

We have to start budgeting like a business where we look to see how much income we have and then decide how we are going to spend it. The way it is done now we decide what we want and then find the money to do it.

Media Enquiries:

Cllr Rick Crouch
eThekwini Municipality
Finance & Procurement Committee
073 418-6996
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