Balance sheets are so-called because they need to balance – that’s often what makes them so annoying.
Just ask Finance Minister Enoch Godongwana.
Cape Town mayor Geordin Hill-Lewis has recently also come under pressure to justify his administration’s draft budget, which faces resistance particularly from residents with valuable properties who face steep rates increases.
The mayor has defended the City’s draft budget, insisting it provides good ‘value for money’ in relation to other metros. He points out that the increases are necessary to fund an ambitious infrastructure investment programme aimed at preventing Cape Town sliding into the same service delivery morass as other major metros, notably Johannesburg.
Cape Town’s relatively good service delivery scorecard – at least relative to other cities — doesn’t come cheap. And to balance the books the City needs to take from somewhere.
In this regard he finds himself in much the same position as the Finance Minister, with a tricky balancing act. For the mayor it’s a choice between a cost-friendly budget that does not fix crumbling infrastructure, or a less-friendly budget that ensures sustainable quality infrastructure – and therefore quality of life.
If the choice is quality infrastructure, then somebody needs to foot the bill. The City is targeting properties valued at R4-million and upwards.
It goes without saying that nobody likes coughing up an ever greater portion of their disposable income, regardless of the value of their property.
Unlike the Finance Minister, the mayor is in the enviable position of presiding over a City whose growth prospects appear more favourable than the national economy. However this too presents a problem: the growth of the City has resulted in skyrocketing property prices, leaving some residents stranded with rates bills they are battling to afford.
Anybody reliant on retirement savings in a stagnant economy must watch their monthly disposable income dwindle relative to their mounting expenses
Meanwhile the City continues to attract a new generation of digital nomads, adding to the incoming tide of ‘semigrants’ from disintegrating metros elsewhere.
While we commend the City for its proactive budget that prioritises key area such as security and infrastructure, we urge the mayor to be mindful of its erstwhile slogan – a City that works for all. Cross-subsidising improved service delivery in poorer areas should not involve pricing others out of the market. The mayor and his team need to be sensitive to the needs of all its taxpayers, without whom it would not have ascended to its lofty position.
We are heartened by recent efforts to mitigate the steep billing increases in response to residents’ concerns. We hope the final budget decision reflects a balanced approach.
With a bit of luck — and no doubt a lot of number crunching – Cape Town’s budget can serve as an example of how to do business, rather than how to chase it away.
John Lawson
CEO of the Cape Chamber of Commerce and Industry
