The most common question I have been asked is: what happens once a town starts to put its rates into a trust account? The answer is: usually nothing.
Several towns have done exactly this, and – apart perhaps from a few residents having their lights cut off and then reconnected after the resident takes the council to court – nothing further has happened. This is a little bit disconcerting for the ratepayers, as some of them find it hard to believe that this ultimate form of protest should be ignored just as soundly as all their previous complaints. The next step, then, once you have rates in a trust account, is to lodge an intention with your municipality to register as an external service provider and to begin to fix the problems yourselves. The NTU will help with this – there is a roads committee to assist with roads, there is a water committee to assist with water supply and sewage plant maintenance (see contact details on the website). For the rest, little expertise is needed – it does not take a rocket scientist to clean up a verge, paint a fence or repair a pavement. It is important, however, to keep paper trails of all your expenditure in this regard so that you can show that trust funds were spent on town infrastructure. If this can be proved (take before and after photographs to back up your expenditure) then you are legally covered.
Some interesting statistics with regard to rates and taxes: personal income tax contributes 8,6% to South Africa’s GDP. Company tax contributes 7,5%. VAT and excise contributes 2%. Compare this with the next largest contributor, manufacturing, that contributes 1,5%. And mining and tourism that contribute 0,2% respectively. This seems to indicate that South Africans are overtaxed in relation to other income streams. Further, only 2,3% of taxpayers account for 29% of all income tax. 5,5 million taxpayers support a population of almost 50 million people.
Additionally, the more tax you pay, the less service you get from the government. Upper income tax-payers get less than 17c worth of government service for every tax rand, but lower income tax-payers get R20 worth of government service for every tax rand. Economist Mike Schussler has been warning for some years that this tax imbalance is unsustainable, especially as each taxpayer supports eight non-taxpaying people. However, it can also go to show that taxpayers, if they do unite, can be quite a force to be reckoned with.
Proposed amendments to the property rates act will increase the tax-exempt threshold for lower-income householders, which means that a greater burden of rates is going to be placed on the lower-middle and middle income earner.
Against the backdrop of the greatest number of service delivery protests in South Africa since 1994, Minister of Local Governance Sicelo Shiceka paid his department’s top officials an average of R100 000 each in performance bonuses for the last financial year. This is over and above their already generous salaries. The Standing Committee on Public Accounts has called this a disgrace and has expressed concern about the government’s practice of awarding performance bonuses for non-performance.
It is going to cost R23 billion to restore South Africa’s roads to an acceptable state, said a parliamentary spokesman during a debate on the state of South Africa’s roads. However, Azir Alli of the National Roads Agency says that the problem is not lack of funds, but lack of good road management. The NTU has established a Roads Committee for this very purpose, with Pieter van der Westhuizen in charge. His contact details are on the website.
Municipal water supply is also under the spotlight. A report released this week identified that 55% of municipalities had water services that were on the verge of collapse. The Water Affairs Minister said that this was good news – she explained this comment by saying that it was positive news because not all water supply services are on the verge of collapse (she added that the country was not yet in crisis because people were not yet dying). However, this report is not absolutely truthful – the real facts are that 55% of the services SURVEYED were in this state. The report was not able to assess all water supply services in the country. Rural water supply was not part of this survey, and it can confidently be assumed that rural water supply would not be in as good a state as city water supply (rural services are on the whole in a worse state than city services because of lack of skills). Therefore these statistics, bad as they are, are actually misleading. The real situation, as revealed earlier in this bulletin, is that only 3% of the country’s water supply services are functional.
The NTU Water Committee is also very active in this regard. Contact details are on the website.
Brits (Madibeng) ratepayers had a meeting with the Local Governance Minister, and discovered that he was incensed by the bad management of the local Madibeng Municipality (which has subsequently been placed under administration and was recently in the headlines for the dangerous quality of their drinking water). The Minister apparently promised not to pursue the matter of withholding of rates until the municipality had sorted out its affairs.
The Minister’s attitude towards withholding of rates has once again raised the question of the legality of this ploy. At first, many legal commentators were of the opinion that it was illegal, but several of them have subsequently changed their minds. The problem is that the issue has never been tested in court. The DA have announced that they are prepared to test this in court in order to get a legal precedent, but I have been unable to confirm this with the DA. If a legal precedent was obtained, and it turns out that withholding rates is a legally permissable form of protest, this will have the most important repercussions for South African society since 1994, as it will change the balance of power in South Africa completely.
Residents in Bordeaux-South in Johannesburg won a court interdict against the municipality to allow them to install boom gates in their suburb. They were able to prove to the court that the area has high levels of violent crime and that petitions to the municipality had gone unheeded. The outcome of the court victory was that the Metro council agreed to meet with the residents’ association of South Bordeaux to try to find a solution to the crime problem.
The Hennenman Residents Forum declared a dispute, withheld rates, and are now using their rates to maintain their town. Over a year, the improvement has been remarkable – potholes have been fixed, pavements repaired, fences painted, traffic circles landscaped, gravel roads graded, weeds on verges mown. The town is looking extremely attractive – and, just as in Sannieshof, it is all done using a fraction of the rates income required by the municipality.
Irene Main is a member of the NTU Water Committee, and she has undertaken to alert the World Health Organisation about the poor state of South Africa’s water supply. She has also made contact with Germany’s Green Party, who are very active in lobbying for better environmental practices. The South African government, when approached by the WHO organization, denied that there was any pollution in South Africa’s water, but Irene compiled a DVD of water pollution and this has caused quite a stir.
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Tags: newsletter, Ratepayers