Finance
In the light of the increasing water and electricity tariffs in City of Cape Town:
What specific measures has she implemented to (a) protect low-income households from
unaffordable service costs and (b) ensure that basic services remain accessible to the most
vulnerable residents?
The Western Cape Government is concerned with the affordability pressures facing all
households, especially low income and vulnerable groups.
(a) The most important protection for all indigent consumers is that they receive a lifeline
amount of basic services for free. National norms provide for a minimum of 6 kilolitres
(kl) of potable water and 50 kilowatt hours (kWh) of electricity per indigent household,
with sanitation and refuse removal support varying across municipalities. This is funded
through the equitable share, and although the subsidy provided does not always cover the
actual cost of providing free services, Western Cape municipalities still provide free
services to more than 370 000 registered indigent households (data from 2024 indigent
registers). This ensures our most vulnerable have access to basic services.
But our concern does not stop there – Provincial Treasury wants to ensure municipal bills
are affordable for all. However, we have to face the fact that many of the drivers of higher
municipal costs are set by national structures and are beyond the powers of individual
municipalities, or the province to address. The two biggest costs facing any municipality
are bulk electricity - where NERSA has allowed Eskom a 9.1 per cent increase this year
– and wages, where SALGA has signed an agreement for 4.75 per cent this year, plus a
notch increase of a further 2.4 per cent that is applicable to most municipal workers.
Municipalities have no choice but to pass these high input costs on to consumers or face
financial ruin themselves (which is clearly not in anyone's interest if we want sustainable
services).
(a) The Western Cape Government continues to work closely with municipalities to improve
efficiency and contain costs, with the aim of limiting tariff increases where possible while
maintaining cost-reflective and sustainable service delivery. This includes targeted
support through initiatives such as the Strategic Integrated Municipal Engagements
where Provincial Treasury provides detailed municipality-specific feedback on draft
budgets.
