11/08/2022
image: Financial Mail
DAILY NEWSLETTER — AUGUST 11 2022
OPINION | EDITOR'S NOTE | PREMIUM ARTICLE
ROB ROSE: Vampire bureaucrats come for the kids
image: ROB ROSE: Vampire bureaucrats come for the kids
Be afraid: your municipality is coming for whatever you have left.
As more South Africans are flattened under their rapidly accelerating bill cycle, politicians and bureaucrats are dreaming up ever more fanciful ways of extracting more money from their cash cow: you.
In recent weeks consumers have been assailed by a series of new fees from their municipalities and state-run firms. And now fat cat bureaucrats plan to eat the country’s children too.
Last week, the National Alliance of Independent Schools Associations (Naisa) raised the alarm on the City of Joburg’s “unilateral” decision to reclassify all independent schools as businesses, dramatically ratcheting up their costs.
Naisa represents 1,557 schools — from wealthy schools like Roedean and St John’s College to inner-city community schools, as well as Muslim, Catholic, Jewish and Hindu schools, often in poor areas — which educate 310,610 children.
Until now, most were classified as “public benefit organisations”, so they paid minimal rates. The municipality wants to change this.
“We’ve no idea why it has done this now,” says Anne Baker, who represents Naisa. She says a “very generous reading” of this decision is that the city is simply looking for ways to extract more money from residents, however it can.
Baker says city officials claim they’re just implementing changes to municipal bylaws relating to rates. “But nowhere in those laws is there anything about the need to reclassify schools as businesses. And [the municipality] did this without even asking anyone for comment,” she says.
She cites an example of an independent school in Soweto, which has been paying R7,000 a month in rates but will now be expected to pay R63,799 a month. This, she says, is “unsustainable”, and will lead to many schools closing.
“There’s a huge misconception that independent schools can afford this, but they can’t,” she says. “Some of our schools offer education from R5,000 a year, up to the very top levels. And while a minority of large private schools can carry this cost, most can’t.”
Their only option: to raise fees, or shut down — forcing more children into the already overcrowded public school sector.
It’s a perfect illustration of the cognitive dissonance inflicting politicians, who typically have sheltered employment and have never been subject to the rhythms of the real economy. Their only business model is you, the taxpayer.
Consider that last year, Joburg’s salary bill rose 17.6% to R14.8bn, including (laughably) R660m in bonuses. Never has the link between what you pay in tax and the service delivered for that money been so tenuous.
But some are now drawing a line in the sand.
Last week, SA’s largest property organisation, the SA Property Owners Association (Sapoa), took Joburg to court to halt its plan to levy a “development fee” for any landowners wanting to develop their property.
In theory, this fee is meant to cover the municipality’s cost of installing new infrastructure. In practice, it’s just another method of extraction because even if the infrastructure is already in place you’re still liable for that fee.
Sapoa CEO Neil Gopal tells the FM that this policy is “another tax levied on property owners as the city wants to raise more revenue”.
Sapoa was told this fee would allow the city to “cross-subsidise services in other areas”. But, Gopal says, not only is it contrary to the law, it’s unfair and “unprecedented”.
Rather than seeking to extract more from ratepayers, Gopal says the city should “focus on cost-cutting mechanisms, deal with excessive levels of corruption and reduce expenses as a way to balance its books”.
And there is plenty of scope for this: municipalities last year clocked up R21.1bn in “irregular expenditure”. Fix this, and you wouldn’t have to fleece your residents.
The alternative, says Gopal, is that businesses will stop investing and shift their capital to more business-friendly cities. “This is already happening at an increased rate,” he says.
It’s a short-sighted approach from the city. But don’t think it’s only happening in Joburg. Across the board, you see towns shunting extra costs onto residents rather than axing useless staff or slashing wasteful spending.
It’s the same philosophy that made Eskom propose a new tariff regime that will make households — even those with solar power which also have an electricity connection as a backup — pay R938 a month for the privilege of being connected to the grid.
And in Thembisa, protests erupted last week over the National Treasury's decision to order municipalities to slash the free basic electricity provision from 100kWh a month to 50kWh from July. News reports said residents felt the politicians were determined to make life “unbearable” for residents.
Residents told journalists that houses in Thembisa are being billed more than R3,000 for electricity and services — in an area where households brought in R4,900 a month in 2014, according to the Centre for Affordable Housing Finance in Africa.
It’s a mindset of extortion that begins in the soporific municipal offices but extends all the way up to the “construction mafias” which routinely demand R15,000 a month “protect” building firms from community protests.
Little wonder that you have incidents like that on the KwaZulu-Natal north coast where, after floods washed away a bridge in April, opportunists set up a makeshift bridge and charged residents R5 to cross the river separating them from their schools, shops and clinics.
After all, if their government can take your money without providing anything in return, why can’t anyone else?
