FINANCIAL CRISIS
JABULANI SIKHAKHANE: Increase in unpaid municipal bills adding to the mess
The continued increase in unpaid municipal bills – up more than threefold in the past decade – is yet another indicator of the depth of the financial and economic crisis SA is in. The rise in consumer debt explains the sharp decline in the quality of public services such as water and electricity, that municipalities are supposed to provide. The crisis has another leg – the basis municipalities use to set their tariffs is no longer fit for purpose. The Financial and Fiscal Commission says municipalities use historical costs to determine tariff increases, not what it would cost in today’s money to replace or upgrade the infrastructure. This means municipal revenue budgets have become unrealistic.
A 10-year view shows that unpaid municipal bills have ballooned from R87bn at the end of June 2013 to more than R313bn by June 2023, the end of the financial year for municipalities. The latest data for the six months to end-December shows the debt had risen to R338.2bn. The biggest dri...
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