The tariff debate

2013-06-10 00:00

I ENJOYED reading the speaker’s opinion piece on June 6, “The DA’s political posturing”. It reminded me of Joseph Jacobs’s fairy tale in which Cocky-Locky and Henny-Penny were going along and along to tell the king that the sky was falling. The speaker started off by rebuking the DA’s political posturing and then rapidly marched into fantasy. On May 31, a full council passed the 2013/14 budget and tariffs. Council did not listen to its majority constituency. The budget passed is not a people’s budget and it is not pro-poor. It is not informed by the requirements of the majority, nor is it responsive to the majority.

Reading what the speaker said, however, we are to believe that Msunduzi’s council passed a magnificent budget, informed and influenced by people on the ground, that consultation was extensive, that Msunduzi had done well to keep its increases low, and that its tariffs and policies are progressive, with the Indigent Policy heralded as “by far the most pro-poor policy this municipality has had”. There was boasting that Msunduzi Municipality’s service tariffs were more friendly than Durban’s.

These posturings are simply not true. There is no indication of any meaningful change from the draft tariffs proposed to the ones the council passed and there has been no change in how the tariffs are modelled. The paradigm shift has not happened. Unless the tariff structures are reconfigured, tariffs will continue to be unaffordable to the the poor and working class of this city.

It is true that Durban Metro’s tariffs are expensive. Durban and Msunduzi have some of the highest service tariffs in the country, but Durban Metro’s tariffs are also progressive for poor households. Durban Metro reduced its electricity tariffs to 5,5% because electricity accounts for the highest component of the bill. Its sanitation charges are linked to water consumption, which means households only pay for the water they discharge. Its refuse charges are linked to property value that provides a progressive tax on the wealthy, but is also more equitable for poor households. Durban provides a full nine kilolitres of water to households for free and its tariff blocks are wider to accommodate the normal consumption by the poor.

The speaker wishes to voodoo us with suggestions that because Durban Metro’s service charge percentage increases appear more expensive than ours, that our services are more affordable. What he does not tell us is off what rand value these increases are made. A 10% increase off R10 is R1, but a lower five percent increase off R100 is R5. So, although the percentage increase off the former is higher, the actual rand value increase off the latter is five times as much. In fact, as can be seen in the table, the cost of every one of our municipal services in Msunduzi is higher than in Durban.

Parochial mathematics, neoliberal economics and a reluctance to investigate the socioeconomic context of the people who live in this city permeate this year’s budget and tariffs.

Msunduzi is using its Indigent Policy as a basis for maintaining an inequitable and unaffordable tariff structure for the majority under the guise that the poor have been taken care of. A means-tested and neoliberal indigent policy cannot, by its very framing, meet the needs of the sheer numbers requiring subsidisation. That is 77% (474 656) of the population or 60% (98 680) of households who qualify for indigent concessions. If the speaker is to be believed, 28% of such households will benefit from the Indigent Policy. However, it really doesn’t matter how progressive the indigent concessions look on paper if the municipality intentionally excludes households from accessing these benefits. In the past financial year, only 3 691 households received six kilolitres of free basic water and 2 521 households received 50 kWh of free basic electricity. The Msunduzi only used 3,3% or R10 million of its entire equitable share of R304 million to finance free basic services to poor households.

In comparison with Durban, instead of a R100 000 cut-off point, families living in homes valued at R250 000 qualify for concessions, which includes nine kilolitres of free water, 65 kWh of free electricity, and free refuse removal and sanitation. Durban spends R2,7 billion on its social package.

Cocky-Locky and Henny-Penny never did get to speak to the king. If anyone is successful to go along and along, and eventually arrive before him, please can the message that is carried be grounded in investigation?

• Julie Smith is a research and advocacy co-ordinator for Pacsa.

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