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Why Durban is the most expensive city

09 June 2013, 18:56

The reason Durban is the most expensive city lies squarely at the feet of the ANC lead eThekwini Council. They do not have the political will to make the difficult decisions required to make Durban competitive.

Durban has a static rates base, even the cities own budget document proudly proclaims that the rates base will only increase by 1% this financial year. And with only 400,000 ratepayers that is an increase of only 4000 ratepayers this financial year.  This 1% has been the foretasted increase for the past few years.

Taking into account the latest StatSA Census figures only 13% of adults in eThekwini are ratepayers, anyone can see how this is not sustainable in the long term.

It is no coincidence that Johannesburg has the lowest rates randage at 0.557 and its rates base sits at 800,000. With Durban’s rates randage at 0.976 it is obvious that Johannesburg’s rates randage is half that of Durban and its rates base is double. Not only is Johannesburg’s rates randage half of Durban’s but it’s percentage of increase at 5.3% is lower than Durban’s which is 6.9%.

To survive Durban has to attract new ratepayers and businesses to the city, a good place to start would be those businesses in Johannesburg that find it cheaper to truck their product from the port to Johannesburg rather than to setup their operations in Durban.

Financial incentives would be a good place to start, when the question was asked of officials in Economic Development the answer received was “we cannot do that because current businesses would be upset that they were not getting the financial incentives” which of course is absolute nonsense.

Secondly Durban has to be competitive, our rates and tariffs have to be reduced over time to at least the level of Johannesburg’s , as a city we will have to tighten our belt but in the long term we will have more ratepayers and rates income than we will know what to do with. Once again this requires the political will so lacking in eThekwini.

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