Municipalities hike tariffs on the sly

Municipalities are busy quietly, but dramatically hiking levies and tariffs for services other than the usual water, electricity and property rates.

Economist.co.za economist Mike Schüssler this week reported that municipalities’ income from consumers and businesses in the third quarter of this year was 72.2% more than in the same period two years ago, reports News24.

Schüssler based his assertion on figures published by National Treasury, summarise the figures reported each month by the municipalities.

“Own income”, which excludes allocations from central government, increased from R30bn to R51.7bn in this period.

The biggest increase, 124.5%, was in the “other” category.

Schüssler said that he suspected that municipalities were imposing levies on items that had not previously been paid for in order to extract more money from the consumer. He said that over two years “other” costs had risen 10 times nominal GDP growth, which was alarming. South Africans could not afford these costs and, moreover, received precious little value for their money.

Anita Botha, a municipal expert at Pro-Active Management Services, said all other levies and tariffs were included in this category. It could for instance involve the hiring of sports grounds, development contributions for bulk services, the cost of graves or traffic fines.

She suspected that the large increases were on specialised services such as the approval of building plans and services aimed at the commercial consumer.

Sake24 conducted a couple of spot checks and found examples of excessive increases.

In eThekwini (Durban) the basic tariff for a three-phase electrical connection (2 401A to 3 200A), according to documentation on the council's website, shot up from R180 000 in 2008/09 to R642 510 in the current financial year – a 256% rise.

Earlier this year bus tickets for the disabled in Tshwane went up from R120/year to R160/month.

Last year a businessman who wishes to remain anonymous received a quotation of R30 000 from a local authority in Gauteng for an electrical connection to a refuse dump that he wished to develop. He had not done the connection, and when he again asked for a quotation this year the price had risen to R130 000.

A town planner employed by one of the foremost outdoor media companies said the Johannesburg Metro Council had introduced a new R3 351 levy for media companies who wanted to appeal if their applications to erect outdoor advertising on council grant had been turned down. He said about 70% of applications were rejected.