‘Don’t kill golden goose’

2008-03-13 00:00

In levying property rates, municipalities must ensure that they don’t kill the goose that lays the golden egg, Local Government MEC Mike Mabuyakhulu warned in a briefing on the implementation of the New Property Rates Act in Durban yesterday.

Asked about the tariff increase of over 400% proposed by the Mpofana (Mooi River) Municipality, Mabuyakhulu said his department and the provincial treasury will be analysing the situation.

He said the long-term aim of the new rating system is to ensure that municipalities are better off financially to deliver services, but that it should not be implemented in a way that is burdensome to property owners.

Farmers who endeavoured to co-operate with the Mpofana (Mooi River) council on implementing the act not only feel betrayed by their municipality, but say the proposed rates tariff, the highest in the country, will force them out of business.

John Armstrong, chairman of the Farmers’ Association’s property rates sub-committee, said that without the farmers, Mooi River would not exist.

His words were endorsed by the business community, who say the outrageous tariff will kill the town. Not only will many existing businesses not survive, but no one will want to move to the area, they say.

Armstrong said farmers proposed that they pay the same as the agricultural sector in uMngeni and kwaSani — 0,05 cents per rand of property value. However, the council ignored their representations and went for 1,25 in the rand. "With a proposed 30% rebate, the rate randage comes down to 0,875 cents in the rand, which is still not sustainable," he added.

Mooi River residents are forming a rates action committee.

Democratic Alliance councillors allege that an explanation for the exorbitant rates is that the proposed tariff will give the town an income of R77 million,

It has been alleged that with this income, the council can push to move from a grade two to a grade three municipality, in which councillors can be fulltime and get better pay.

But Mpofana only needs R16 million more to move their budget from its existing R34 million to the R50 million needed to qualify as a grade three municipality, said the DA.

Municipal manager Muzi Madlala refuted this allegation, saying other factors, such as population, are considered when re-grading municipalities.

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