SPEECH: Revenue shortfall in Water and Sanitation

ACDP notes and agrees with the recommendations appearing on Page 91 but notes with deep disappointment that there remains no long term solution.

The reality, is that the reduction of consumption by rate payers is inevitable – as service costs rise, as exorbitant rates increases continue years after year, as consumers reduce their use and seek alternatives in order balance their own monthly budget – which is under increasing strain.

The reality is that the City can no longer milk consumers to fund exorbitant capex and opex budgets.

High income consumers can afford to find and fund alternatives – as more of them do so, the burden of funding free services to the increasing number of indigent households, will increasingly fall on the middle income consumers.

Cross subsidisation is necessary and a natural expression of our humanity towards each other, particularly the most vulnerable, the poorest and the weakest among us – but such high levels of cross subsidisation are unsustainable as the middle class funding source is squeezed more and more.

This has remained a matter of deep concern to the ACDP for many years.

The “Financial Implications” component of the report records that the “long term impact needs to be monitored and proactively managed…”  We are not convinced that this is adequately addressed.

Obvious options are for the City to reduce its Capex and Opex budgets, to introduce zero % rates increases for a few years and for the City to do more with less – The more disposable income we leave in consumers pockets, the more they are likely to increase consumption.  Yet the DA continues to reject these affordability proposals.

The DA wants Cape Town to be an opportunity city – by increasing consumers disposable income, you will be providing opportunities.  By continuing at these unaffordable levels of rates increases and expenditure, the DA is reducing opportunities for ratepayers.

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