Rob Rose Editor: Financial Mail
Picture: Gallo Images/Guillem Sartorio
Picture: Gallo Images/Guillem Sartorio

If there’s a message dripping in poor taste, it’s the exorbitant bills sent to South Africans – including thousands of newly unemployed and those on reduced salaries – or rates and utilities, accompanied by threats to cut off power and water.

It was already a major drain having to pony up for municipalities’ ingenuously crafted ways of extracting cash from residents: what indeed is a “demand management levy” or a “network charge” (up, incidentally, 13.25% in a year)? In Joburg we’ve also seen a 13% rise in tariffs levied by City Power, a 10% hike in water costs and sewer charges, and soaring property values arrived at by some world-class thumb sucking. (Arguably it’s the only world-class thing the City of Joburg now does.)

The problem is, you can bet this money isn’t all being spent on services or infrastructure. Last year auditor-general Kimi Makwetu reported that of the 257 municipalities he’d audited, only 18 got a clean audit. Cumulatively they racked up R25.2bn in “irregular expenditure”.

In Joburg alone, “irregular expenditure” came to R2,1bn. This suggests your rates and utilities payments aren’t all going to maintain the burning circus that is their call centre, where calls can be trampolined between departments for days.

Redi Tlhabi, the author and former radio presenter, this week wrote on Twitter how she’d received a R16,947 water bill that was clearly wrong. The city responded to her complaint with the same sort of elegance and savvy it usually does: it asked her to send a photo of her meter reading, which she’d already done.

But it sparked a tirade from many others in the same position, with the central complaint being: “There is nothing we can do.”

UCT law professor Nomboniso Gasa pointed out that the City of Joburg just ignored her correspondence. Other horror stories across the country, including from Cape Town, Pietermaritzburg and Tshwane, included a R214,000 water bill and a R60,000 monthly utilities bill for an unoccupied house.

Little wonder that pressure is building on municipalities to do what the private sector has already done: cut rates and suspend payments. You know, act a little human. If the banks can do it, you’d think that municipalities, who got R20bn as part of President Cyril Ramaphosa’s “emergency stimulus”, might be amenable to it too.

Neil Gopal, the CEO of the SA Property Owners Association (Sapoa) has sent a letter to 44 municipalities asking them to cut ratepayers some slack, as the FM reported last week. The law allows municipalities to grant exemptions from rates in “special circumstances” like, you know, a pandemic. Sapoa also wants municipalities to freeze rate hikes this year.

The municipalities of Cape Town and Stellenbosch have at least given some rates relief. Those who earned less than R6,000 a month and who’ve lost their jobs are eligible for “indigent relief”, while households can also apply to pay off their rates without interest. It’s not enough by a long shot, but at least it’s something.

The Johannesburg Property Owners & Managers Association has submitted a plan to the city’s mayor, Geoff Makhubo, asking for concessions for inner-city landlords, including a zero increase in rates, electricity and water charges, and a 50% cut in sewer charges.

Yet last week, Joburg’s member of the mayoral committee for finance, Jolidee Matongo, spoke in torturous gobbledygook about how the city will “review” its charges.

He said: “The knock-on effect of the decline in revenue means that the city has to align budgeted programmes accordingly. This is to ensure that a more prudent approach to fiscal management of the current budget is adhered to, while finding innovative ways to continue meeting our service delivery and developmental agenda.”

If your goal is to avoid communicating with your residents, it’s a master class. And it’s compelling evidence that MBA marketing classes have destroyed English.

In Joburg, DA caucus leader Leah Knott says: “The stark reality is that many residents are finding it next to impossible to pay municipal accounts currently.” Her party has suggested remedies, including suspending interest on all municipal account arrears during the lockdown and a payment holiday on rates for three months.

But the issue is wider than Covid-19. It’s where the rubber hits the road of the wave of above-inflation salary hikes for public officials in recent years – a trend which hasn’t been replicated in the private sector companies, which mostly employ the ratepayers.

Huge bills from municipalities, who’re more often than not incompetent and unaccountable monopolies, are choking South Africans, who’re already under the cosh from a brittle economy. A “payment plan” to pay your rates later doesn’t exactly solve that problem.

In theory, some municipalities have an ombudsman to deal with problems – if you can find them. Last I checked, the website of the Joburg ombudsman didn’t work, and the office most recently updated its Facebook page in September 2019.

There needs to be a complete overhaul in the way municipalities make money. With fewer people able to pay, it’s hardly sustainable to bill those who can pay increasingly larger amounts and cut off everyone else. As they say in Wuhan, there’s no time like Covid-19 to change the way you work.

Creating a black market

The municipal debacle illustrates, once again, that while President Cyril Ramaphosa can say the prettiest things, and appear exceedingly presidential, his lockdown will ultimately be judged by the lower common denominator of public officials. In his cabinet the lowest common denominator has come to be defined by police minister Bheki Cele, co-operative governance minister Nkosazana Dlamini-Zuma and trade minister Ebrahim Patel.

Contrast, for example, the initial glowing coverage of SA’s approach to the virus by the BBC to the latest assessment by the New York Times, which describes the burgeoning trade in black-market cigarettes and alcohol. “I feel like I’m buying cocaine,” one woman told the newspaper, after she’d paid three times the pre-lockdown price for 20 Courtleigh cigarettes.

As the New York Times puts it, “the ban has fuelled an underground cigarette trade that was thriving even before the lockdown”.

It’s a point well made, too, by City Press editor Mondli Makhanya, who writes how the danger of this moralistic madness is that SA’s modern-day Al Capones will have established their criminal networks by the time the lockdown is lifted. It’s just one illustration of how a little more thought about the regulations might have helped it appear less farcical.

Patel, for example, has been widely ridiculed for saying it would be “unfair” to allow e-commerce when other retailers with physical stores aren’t allowed to trade. As Bank Zero chair Michael Jordaan put it, this is the same as “not allowing mobile phones because it is unfair to landlines”. And, my former colleague Stuart Theobald added, it’s like not allowing people to work from home because it’s unfair to those who can’t.

It’s a sign of the confused and paternalistic psyche inside the governing party, where too many times pet projects are elbowed into existing policies, even though they don’t directly address the actual issue, such as: “Cigarettes are bad, so let’s use this moment to help our citizens make the right decisions.” (Covid-19, as Naspers chair Koos Bekker warns here, will either tip SA left or tip it right.) 

It’s yet another indication why Ramaphosa needs to redirect the thinking on the lockdown. The economy is seizing up and, if even half of what economist Nouriel Roubini warns about actually happens, precious hours are being wasted due to a lack of clarity within our government on what the purpose of the lockdown really was.

This is a roundup of the best Covid-19 news from the web, brought to you in today’s FM lockdown newsletter. To subscribe, for free, click here.

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