Tighten your belt for rates and taxes
2010-06-04
Sieb Sieberhagen
A LAST attempt of the DA alliance during last week’s special council meeting to stop the approval of the municipal budget for the next three years, was unsuccessful.
The medium-term budget was finally accepted with 32 votes (ANC alliance) versus 26 (DA alliance), paving the way for a steady increase on all tariffs for the following three years. Taxpayers received good news when a property rate increase of only 5% was accepted for the 2010/2011 financial year. This rate will apply for the 2011/2012 and 2012/2013 financial years. Last year the increase was 7,5%. The DA has argued that the tariff for the next three years should be limited to 2% below the CPI inflation rate, currently 6%. In a calculation given by the Drakenstein Financial Department a small household will pay 9% more for all services. Other good news is that the municipality have cut their luxury spending, such as travel allowances, entertainment, conferences, telephones and stationery to the bone to save R88 million over the next three years. These savings are necessary because Nersa approved a tariff of only 20% for prepaid power and conventional power. Drakenstein Municipality had proposed a 26,5% tariff increase for conventional power in the preliminary budget. In this medium-term budget, electrical rates will now increase by 20% each year, except in the 2012/2013 period when conventional electricity will increase by 21%. This 20% tariff increase has necessitated that expenditure must be cut back by more than R21 million in the 2010/2011 financial year. Cavin Petersen, head of finance of Drakenstein Municipality, has indicated that the 5% increase in property rate is 1% less than the 6% planned when the preliminary budget was accepted on March 31. “It will mean we have R1,5 million less income, which means that the overtime budget will be reduced by R1,5 million. We expect that all departments will have strict control over their overtime spending. These cuts will not put emergency services in jeopardy.” The capital budget amounts to almost R287 million for the period 2010/2011 and in 2012/2013 it will rise to just over R315 million. Of this total R130 million will come from the council’s own coffers, R113 million will be funded from loans and R43 million will be received from state grants. Pensioners with an income (single or combined) of R3 780 will pay 50% less on property tax in the new financial year (apply at the municipal office).
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