Court rules against City of Cape Town on tariff hikes

Added: 2026-05-08

[00:00:00]as there's very little description difference between them. Two yesterday's Cape High Court ruling, unanimous ruling of a bench of three judges including the judge president of the division and judge Kate Savage who has been tapped to head to the Constitutional Court. So it is a considerable uh collection of legal wisdom and the Cape High Court ruled in favor of AfriForum and the South African Association of property owners declaring the city of Cape Town's property value based fixed charges for cleaning levy, water and sanitation unlawful. These are the These are the tariffs that you're paying now, but the court judgment did make it clear that there would not be a recovery process authorized by the court, but it did say because we've declared them unlawful, illegal, invalid, unconstitutional, you cannot continue with them as you intended to do in the 2026-2027 budget. These charges come to an end on the 30th of June. Morné Mostert joins us now ahead of local government for one of the litigants, AfriForum. Morné, good morning.

[00:01:08]Good morning, John.

[00:01:10]Obviously, if you take a case to court and you win that case, you are pleased.

[00:01:16]>> [clears throat] >> Yes.

[00:01:17]Obviously, we welcome this judgment. I do think that it is important that municipalities understand that they don't have unfettered power, which is one of the critical things that the judgment says. And when tariffs are being set up or are being structured in a certain sense, it must not only be so to fill the budget, but it also must be done where tariffs must be proportional to the to the the use of that specific service. And I think that was the one most important part why we started this case and just to confirm this principle and specifically to let other municipalities across the country that maybe doesn't have the management structures that the city of Cape Town has, but that other municipalities don't start ramping up these tariffs, which could be disastrous for most consumers in South Africa. Cuz paragraph 122 of the ruling seems to me germane. Whether the charges are necessary or desirable to ensure an equitable or appropriate contribution to infrastructural services which may allow the city to meet its integrated development plan obligations, that does not resolve whether they are lawful. No matter how well-intentioned they are, they still have to be lawful and the court said they are not.

[00:02:38]And you you speaking to us from Pretoria. I I presume you visited Cape Town, but you don't live here.

[00:02:45]And I spoke to Councillor Jordan Hill-Lewis yesterday afternoon and he said, "Look, okay, we accept the judgment of the court. We might appeal it. We're considering that, but the monies that we raised" and I read out to him the charges on my municipal bill, which is 808 rand through these charges.

[00:03:01]And I said, "Jordan, you're still going to get that 808 rand from me if not this way, then another way." So the the quantum of rates contributions is still expected to be the same because the city has a budget, which he says he is not going to change. He's not going to reduce infrastructure development plans because that would be disastrous and put Cape Town on the same path as Tshwane and eThekwini and Mangaung and Nelson Mandela is. So he's still going to get the money from citizens and his point is that by doing it by making it part of the rates bill, taking away the property value link, making it consumption based, then potentially and almost certainly increases rates contribution from lower and middle-income households and reduces rates con- contributions from wealthy households. So I mean, how if if this is part of Solidarity's thinking, how do you deal with the fact that the city of Cape Town feels it needs to continue to build infrastructure. That costs money. Their best source of money is the ratepayer.

[00:04:11]They are going to get that money from the ratepayer one way or another.

[00:04:16]Yes, well the the the the whole purpose of the application was to say that when compiling a tariff structure, when when when you go through the specific processes of compiling a tariff, it's important to understand that the city has all of the relevant data. Mean meaning for the last 10 years they didn't understand the the payment demographic of the city of Cape Town.

[00:04:45]So the one reason why they do want to have a basic charge added to the tariff is to ensure that they bring enough money into to pay firstly the fixed costs of the let's say water budget. For so for the water budget, there's a a fixed costs which is for infrastructure and and all of those different types of costs.

[00:05:12]So in our discussion with the city, we said that when you're compiling a tariff structure, you can you can do it multiple different ways, but the fact that you go on and do it on the property value of of of your consumers, that's where it it goes farther than what the laws of South Africa permit, which is basically what we said.

[00:05:41]But you can understand that if you have if you do have the data and you can understand that maybe a 50 rand or a specific amount can be equated to everyone, that doesn't mean that it's only going to be the middle or lower classes of going to not benefit of it. That's what what AfriForum stands from the beginning was that in the process of compiling a tariff structure, one must do so to be equitable.

[00:06:12]Lawful is what the what the judgment said, but also equitably to understand that if you do have the data, there is good mechanisms to raise the amount of funds.

[00:06:24]So well well Morné, let's let's see. The city says it's gone back to the drawing board. It wants to try and find a way of continuing to fund infrastructure development and keeping a degree of equitable treatment of citizens. Let's see what they come up with and perhaps then we can talk again and see what you what you and AfriForum think of what the city puts on the table to replace these flat tariffs across the city.