Indications that a new Property Rates Bill would be tabled in Parliament caused a flurry two years ago when groups representing mainly white ratepayers feared that it could result in a massive increase in municipal property rates. Instead, the result of the tabling of the Bill in Parliament has sent cold shivers down the spines of South Africa’s political left.
The key concern raised by the Congress of South African Trade Unions (Cosatu) is the proposed establishment of special rating districts.
In a written submission to the National Assembly provincial and local government committee, chaired by African National Congress MP Yunus Carrim, Cosatu said while it supported “the essentially redistributive property rates policy framework embodied in the Bill … we are however, concerned that the introduction of the special rating districts is likely to entrench disparities between the high income enclaves and the low income areas, which starkly characterizes the apartheid spatial, social and economic order.”
The Bill provides for additional rates to be charged, on the basis of property values, over and above normal rates in those areas that are defined as special rating districts. The Bill says the municipality may define the area and “levy an additional rate on property in that area for the purpose of funding for improvements exclusively in that area”.
The Bill says that before determining a special rating area, a municipality must consult the local community and obtain the consent of most members of the community in the proposed special rating area who may be required to contribute to the additional rate.
The municipality may also “establish a committee composed of persons representing the community in that area to act as a consultative and advisory forum for that municipality”.
When a municipality establishes a special rating area, it must also determine the boundaries of the area and indicate the improvements to be effected in that area.
Democratic Alliance MP Gloria Borman said Cosatu’s arguments that the special rating districts were essentially racist “is nonsense”. Suburbs today were increasingly becoming racially integrated. She said it was likely that the system could, for instance, be used to provide extra safety and security measures that were not being provided by the national department of safety and security.
Carrim said it was “early days yet” and that the Bill still had to be revised following this week’s public hearings .
He added that more exchanges needed to take place with Cosatu to find out precisely what their concerns were.
“The issue is not so much whether one has special rating districts, but what they seek to do … whether they will in fact entrench inequalities within municipalities.”
He said he did not believe there would be a problem, but MPs on the committee might need to put forward provisions “to prevent undue inequality”.
He explained that special rating districts could serve a role if appropriate legislation “to prevent inequality” were passed. He said the districts would benefit citizens by attending to issues of crime and refuse collection “and revitalisation of CBD economic growth and investment”. They could also boost employment through special initiatives.
There was nothing stopping a municipality, he said, from using the concept to declare a black township — such as Khayelitsha in Cape Town — as a special rating district for a specific upgrade or to promote economic growth.
Public hearings on the Bill are scheduled to continue on Monday and deliberations by MPs will begin on Friday May 23.
The Bill, which is aimed at boosting municipal revenues, does not allow South Africa’s 284 local authorities to tax the first R15 000 of the value of residential properties.
The Provincial and Local Government Minister in consultation with the Finance Minister may increase the limit of municipal rates to account for inflation.