LETTER: Cape Town must use its wealth to help the poor
Investment in sensible urban projects will ultimately pay for itself
Brian Kantor develops an important argument for the City of Cape Town to spend more on infrastructure and services to maintain property values for ratepayers in the city (“More public-private partnerships, please”, June 4).
The city has plentiful reserves and a low level of debt, in stark contrast to the weak financial position of the national government. However, the case for Cape Town increasing its spending — both by using more of its reserves and additional borrowing — goes beyond protecting the property values of existing ratepayers.
The city has a constitutional mandate to extend essential infrastructure and services to poor and marginalised communities living in inhospitable conditions, often without sanitation, clean water, electricity and refuse collection. Enhanced investment in the built environment and community services would also provide a badly needed economic stimulus post-Covid-19 and create vital jobs and skills to counter rising unemployment.
Targeted public spending on the development of land and infrastructure to accommodate the future growth of the city could lever in further private investment and in due course generate higher tax revenues to help cover the costs of the original expenditure.
This is the beauty of investing in sensible urban projects and programmes — it generates valuable public goods, spurs economic multipliers, provides pathways out of poverty, instils hope in the future, and ultimately pays for itself. The city should not be sitting on vast amounts of cash in the bank when it could be used much more productively to help get us out of the economic and social crisis.
Prof Ivan Turok, Human Sciences Research Council and University of the Free State
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