Cape Town city council relief ‘a step in the right direction’
The city extends offer of relief to some rebates
Quintin Rossi, CEO of Spear Reit, one of the property companies which has lobbied the City of Cape Town to freeze rates, says the relief measures announced by the city are a welcome start but more comprehensive measures would help thousands of businesses and not just landlords.
Rossi and other representatives of property landlords sent a letter to the city at the end of March pleading for a freeze of rates and taxes to ease pressure on companies of all sizes that cannot trade during the national lockdown.
The city initially said it could not afford the measures. However, this week it agreed to provide a degree of relief.
The city said it would also offer rebates.
“Due to the economic impact of the Covid-19 emergency, many individuals and businesses have had sudden reductions in their incomes. The city has adjusted the processes of its indigent, disabled and pensioner rebate applications to enable those severely affected to qualify more quickly for these rebates,” it said.
Normally processes required the assessment of income over three months to enable qualification. This is now reduced to an assessment of one month of income so that people can qualify more quickly for the benefits. The rebates should be backdated to April 1 2020 or the month in which the income was lost. It would be valid for twelve months unless there is a change in the person’s income or they are re-employed, in which case they need to notify the City.
Deputy mayor Ian Neilson said these additional measures were over and above the R3bn in rates and service relief the city already offered. One example was that water at 350l per day was already provided free of charge to 40% of the metro’s population. Further relief steps were being considered for implementation in the 2020/2021 financial year and will be announced at a later stage.
Rossi said the city's move was welcomed.
“To the extent that the City of Cape Town has now realised that there is a real need for them to come to the party, I am reasonably satisfied. I do however view this as an initial offering however a more meaningful freeze on the property rates only portion for all Capetonians would have a more far reaching impact on the clear and present cash flow constraints being experienced by every Capetonian at this point in time,” he said.
“We remain resolved in our appeal that the City of Cape Town has the financial abilities at its disposal to assist Capetonians. The cash position and ability to adjust cash allocations by the City of Cape Town is within their mandate and powers and should be done as there is no playbook for managing Covid-19 and its impact on the economy and citizens alike,” Rossi said.
“We wish to thank the City of Cape Town for their initial relief offered and we look forward to a further relief package in due course,” said Rossi.
Neilson said rates and service charges comprised an amount equal to 72% of the city’s income per month.
“Take this away for some months and the city ceases to be able to deliver its services. All local governments are in this position. Even though the city is perhaps stronger for its sound financial management over the years, it cannot afford to have months of no income from rates and services,” he said.
Covid-19 costs are set to rise over the weeks and months ahead and cash flow could reduce by between R1bn to R3bn per month, depending on how it was managed.
A reprioritisation of budgets and programmes was under way.
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