Mayor Mxolisi Kaunda is expected to deliver the city’s consolidated budget, as well as announce property rates, electricity and water price increases for 2024-25, on Friday. (Darren Stewart/Gallo Images via Getty Images)
The eThekwini Municipality says it is aware that many households are struggling financially, but it cannot approve a budget with no price increases because it will be paying more for electricity and water, due to tariff hikes by Eskom and uMngeni-uThukela Water.
Ratepayers are calling for a “zero” price increase in property rates and water and electricity services and have urged the city to tackle its R13 billion arrears debt burden and R2.41 billion in irregular expenditure ahead of its budget announcement on Friday 3 May.
But eThekwini mayor Mxolosi Kaunda told a media briefing on Thursday that, at the time of presenting the R67.3 billion draft budget for 2024-25 on 11 April, the council had included a R59.7 billion operating budget and R7.6 billion capital budget, and that Eskom’s tariff increase of 12.72% and uMngeni-uThukela Water’s average price increase of 9.5% had constrained it.
Kaunda is expected to present the city’s final consolidated budget, tariff adjustments and key initiatives for the medium-term revenue expenditure framework on Friday.
eThekwini Ratepayers’ Protest Movement chairperson Assad Gaffar told the Mail & Guardian that the organisation, which comprises disgruntled ratepayers across the city, had already filed a 53-page objection to the city’s proposed draft budget, in which it claims many battling households are faced with “the difficult choice between having to pay their municipal bill or putting food on the table”.
According to the objection, households across the income spectrum are having difficulty balancing their budgets in the face of the soaring cost of living.
It cites, as an example, a woman named “Thandeka” who earns between R3 500 and R4 000 a month and has to spend R1 500 on rent, R900 on transport, R900 on food and toiletries, R1 000 on a loan repayment for school uniforms, R500 on prepaid electricity and R75 on the doctor. This reflects a budget deficit of at least R875 every month without factoring in future price hikes.
Similarly, “Mrs Creswell” has a R24 509 budget deficit, despite earning between R35 000 and R37 000 a month, forcing her to take a second job to support her two children, unemployed husband and father.
Her municipal bill, at R7 800 a month, is more than she spends on groceries, consuming 22% of her monthly income. Her mortgage bond is R18 000, school fees are R6 400 and travel costs are R2 500. She also has credit card repayments, wi-fi and other expenses.
A pensioner also wrote to the movement complaining about an inordinately high municipal bill of R6 371.01, more than double the previous month’s one R2 805,40.
“We are staying in a flat and our utilities bill is coming to a very high amount. And I don’t understand. The last time, we borrowed money to pay because we were afraid of getting cut. But now I can’t borrow anymore and I am struggling. Please tell me who I can speak to to assist me with this,” the pensioner wrote.
The objection, which argued there should be no tariff increases, noted that basic food items have doubled or tripled in price in recent years.
Gaffar said ratepayers wanted to know what action the city would take regarding the auditor general’s 2023-24 report findings, which reflected that reasonable steps had not been taken to prevent irregular expenditure of R2.41 billion caused by non-compliance with local-content legislation.
He also asked what the city was doing about government entities, city staff and councillors who have defaulted on their municipal bills.
Government departments owed R825 million, parastatals R314 million, councillors R1 million and city employees R46 million at the end of February 2024.
“Before you come to the ratepayer, what plans are in place for recovering debt from city employees? Will their salaries be docked? How is it that municipal employees’ city debt has increased by 40% in the last 6 months alone?” the eThekwini Ratepayers’ Protest Movement asked in its objection.
“Since last year’s increase, it is our assessment that the consumer arrears base has doubled. That should be indication enough that these increases are not sustainable.”
Municipal manager Musa Mbhele told Thursday’s media briefing that the city was aware households were struggling but it was not possible to approve a “zero-rated” price increase for property rates and municipal services.
He said the municipality’s R2.41 billion in irregular expenditure did not comprise funds that had been wasted, as it had obtained value for goods procured, but the expenditure was deemed irregular because eThekwini had not complied with its internal policies regarding local content.
“But everybody goes out and says, ‘Irregular expenditure — R2 billion,’ as if we’re eating that money but we have not eaten it. Goods and services are there, they are bought,” he said.
Mbhele said the city was docking the salaries of staff and councillors whose municipal bills are in arrears and disciplinary action would be taken against those who are more than 30 days in arrears.
“We acknowledge that people are struggling to afford services — they no longer have disposable income. The first victim is services, once they have bought food and paid school fees, so the household debt is there. That’s why we’re always very conservative to ensure that we don’t unnecessarily increase the tariff,” Mbhele said.
The municipality was cutting off services to defaulters and needed help from the national government for the debt to be deducted from annual allocations.