STATEMENT BY BRETT HERRON, GOOD MEMBER OF THE WESTERN CAPE PROVINCIAL LEGISLATURE & GOOD SECRETARY-GENERAL
28 May 2021
R4 BILLION DEBT WRITE-OFF IS HIGH POINT OF CAPE TOWN’S LARGELY ANTI-POOR BUDGET
The City of Cape Town’s proposal to write-off R4-billion in old debt to alleviate economic hardship will be welcomed by hard-pressed consumers.
But the benefit to consumers will not alleviate their struggles to pay monthly bills that will continue to include punitive water tariffs.
These tariffs, introduced in February 2018 during the drought, are a primary cause for ratepayers’ debt. Within a year of introducing this tariff, the City’s debtors book grew to nearly R10 billion in unpaid municipal accounts.
The vast majority of this debt is not being written-off, as the write-off relates to debt incurred prior to March 2018.
The proposed write-off therefore acknowledges that the water tariffs resulted in unaffordable bills, and that residents have been buckling under the strain – but doesn’t really change anything.
Residents who have been unable to keep up with their payments will continue to struggle. Their monthly burden has not been reduced. The City’s debtor book will quickly grow again.
As a consequence, the budget that the city adopted on Wednesday will continue to create more financial hardship for struggling households.
Writing off old debt that is difficult to collect, while retaining and increasing the tariff structure that created the circumstances of debt and hardship in the first place, is an anti-poor exercise in shifting deck chairs.
Ends…