uMngeni’s sleight of hand

2009-07-21 00:00

IT is perhaps inauspicious that on the day “Recession Shock” headlined the front page of The Witness, the uMngeni ANC-led council opted to burden ratepayers with municipal cost increases of 21% to 54%. Worst hit is Howick West, with 99% of the community adversely affected. Democratic Alliance concerns about prejudice to those least able to endure the economic contraction fell on deaf ears, while municipal officials sought to increase their high salaries.

A hundred-and-seventy Howick West homes (valued R200 001 to R300 000) are subject to a municipal tariff increase of 34% to 54% as of July 1 due to the imposition of refuse removal charges, while a further 154 homes (valued R300 001 to R400 000) will see a rise of 26% to 34%. Throughout the urban nodes of uMngeni, one out of five rateable residential properties face an increase of 21% to 54%, with another two out of three expected to pay 13% to 21%, well above the current and projected inflation rates of 8,5% and 5,4%. The neediest people’s rebate of 30% has not improved, and does not apply to the new refuse tax of R45,60 per month per household. Others do not qualify as pensioners or disabled with income below R8 000 per month, nor have savings to claim a 10% early payment incentive.

This comes at a time when President Jacob Zuma’s State of the Nation address emphasised the need “to minimise the impact on those most vulnerable … to cut our cloth according to one’s size”, when almost one out of every two tenants are defaulting or paying late, when over 4 000 homes are being auctioned every month and when the property market is awash with homes that have been for sale for over six months.

In his State of the Province address, Premier Dr Zweli Mkhize focused on the economic recession closer to home, reminding us that with 117 000 jobs lost in the first quarter, KwaZulu-Natal has lost more jobs than any other province. UIF benefit payments having increased by 31,7% confirm this, compelling the raising of the relief period from eight to 12 months, to help see out a downturn of up to a year.

In his budget speech to Parliament, the new Minister of Finance, Pravin Gordhan, warned that excessive increases in tariffs are likely to be counterproductive, resulting in higher levels of non-payment and increased bad debts. uMngeni statistics show this to already be the case. An average of 600 homes are disconnected from services every month for non-payment. An average of 700 households per month have had to make arrangements with the municipality to pay off debt in instalments. R54 million is owed for longer than 150 days, with the likelihood of recovery less and less the longer it is overdue.

The Minister of Finance called on municipalities to explore imaginative ways of structuring tariffs to generate resources. However, last year the municipality dismissed, without due consideration, properties not on the roll, and this year a sample of property valuation roll errors average a discrepancy of R1 million rateable value per property, realising up to an additional R3,8 million per annum, with the amount lost to date a likely R15 million. This is just the tip of the iceberg. With greater efficiencies in rate collection and billing there is no need to subject the community to increases, in fact a lower rate-randage would be the aim.

National Treasury Circular 48 calls on municipalities to justify all tariff increases (not just rates) exceeding the six percent South African Reserve Bank’s inflation upper target, to ensure that funds are used for service delivery, not frills. Likewise, delivering her budget for the 2009/2010 financial year, KZN Finance MEC Ina Cronjé asked government departments to freeze posts and cut back on expenses. So the sleight of hand in introducing a refuse removal fee, having the effect of increasing overall costs by several times the inflation target in a recession, is all the more disconcerting when efficiencies are ignored and the budget is inflated by inordinate official salaries (conveniently left off the draft budget for public scrutiny), administration function excesses, a house, residential costs, perks and body guards for the mayor, self-congratulatory advertising campaigns, and a subsistence and travel policy upgrading air travel to business class at four times the cost. A reduction in officials’ salaries is a start and a fairer valuation roll and a general overhaul of expenses is the next step.

• Tim Lindsay-White is an uMngeni Municipality DA councillor.

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