The Mayor of Cape Town, Patricia de Lille, has argued that the City is losing revenue to its fiscus because people have heeded the advice to reduce water usage. As a consequence there is a need to bring in the required revenue to pay for new “augmentation” initiatives. Thus she will be proposing to the City council the need for a new water surcharge. But she acknowledges that there will have to be buy-in from the national Finance Minister Malusi Gigaba
“You can’t call it a levy. You can call it a surcharge,” De Lille explained at the Cape Town Press Club interactive session on water usage and ways to resolve the current water crisis.
She said if the City council supported the initiative for a new surcharge, then it would have to go to the national minister in charge of the treasury, Malusi Gigaba, for his approval. It would also have to go through a six-month public consultation process before it could be implemented in Cape Town.
Noting that if a household’s previous water bill – before the drought restrictions were imposed of 87 litres a day – stood at about R300 a month, such a household was now paying only R50 or R60 for water. That is if they are good boys and girls, saving water and keeping below the daily limit for households. This of course, is translated into a big revenue loss for the City of Cape Town.
The idea behind the surcharge is that those living in properties worth a wee more will have to pay a surcharge. “The idea is to have it scaled,” she said. “Say for instance, the value of a house is R2 million, you will pay R123 a month (as a surcharge). If you live in a mansion of R8 million (the property valuation) then it will not be more than R1 000 a month.”
This is over and above any charges for actual water usage, she explained.
Asked if she foresaw any political fallout – a loss in Democratic Alliance support in the city – as a consequence of the proposed tax, she said it should not be viewed as a tax. She however, did not entertain an answer to the question about the political fallout.
She said plans to augment water supplies were well advanced, with aquifer tapping and desalination plants going full steam ahead.