Bay political parties propose payment relief for businesses and residents

Forfeit rates and help struggling Nelson Mandela Bay residents and businesses instead —  that is the call from political parties in the city.

Their appeal to the municipality comes as dozens of businesses battle to stay afloat and thousands of residents join the unemployment queue in the wake of  the nationwide lockdown that took effect in March.

This as the city’s collection rate dropped from 85.7% in January to 83.9% in March and is likely to decrease even further as the effect of the lockdown on the economy starts to bite.

The ANC in the Bay proposed a five-month rates holiday, while the DA said it should range between three and six months. .

Several businesses in the city have been hit by protests over unpaid salaries since March, reduced salaries or being placed on short time.

Speaking in a virtual media conference on Monday, DA councillor Malcolm Figg said the municipality should take unspent funds from infrastructure projects and provide relief for businesses and residents.

He said the money could be redirected to assist small businesses during this period.

“The DA is proposing that the metro invokes Section 29(1) of the Municipal Finance Management Act.

“This states that the mayor may, in case of emergency or under exceptional circumstances, authorise unforeseeable and unavoidable expenditure for which no provision was made in an approved budget.

“This strategy should be used to move money away from capital projects that won’t be finished before the financial year-end due to the lockdown, provided such projects aren’t critical to basic services.

“We suggest that provision be made for relief of rates and water and sanitation charges where a need for this exists,” Figg said.

ANC regional task team co-ordinator Luyolo Nqakula also urged the municipality to establish a support fund for small businesses in the metro, among other proposals.

He proposed that the city contribute between R100m and R200m as seed funding while roping in private companies in the automotive sector to help small business owners.

“To provide a comprehensive response, the municipality must set aside [a] budget to provide [for] vulnerable citizens, businesses, particularly SMMEs [and] EMS [emerging micro enterprises], which will be hard-hit by the effects of Covid-19.

“This will also assist the municipality to institutionalise the provision of support to households and businesses confronted by these challenges in times of disaster due to slow economic growth and unemployment,” Nqakula said.

According to the department of labour, more than 77,801 claims to the value of R4.47bn had been paid by the department under the temporary employer/employee relief scheme (Ters) to 1.1-million employees.

In addition, 65,088 normal UIF benefits totalling just more than R1bn had been paid from March 26 to April 30.

SA’s commercial property sector also recently urged local governments to introduce rates-relief measures to assist landlords and tenants who were suffering severe cash-flow constraints due to the lockdown.

Budget and treasury political head Mkhuseli Mtsila said the United Front would support a temporary reprieve, particularly for tenants who were unable to pay as a result of the lockdown.

“There must be an arrangement for outstanding rates over a longer repayment time that must be considered under the current economic climate.

“The extent of tariff increases can only be linked to the preparations of the 2020/2021 budget,” Mtsila said.

UDM councillor Mongameli Bobani said that if he were still mayor, a payment reprieve or holiday option would already exist for struggling residents.

“It would not even have to be debated. It is just something that must happen,” Bobani, who was ousted as mayor in December, said.

He said such a plan would bring much-needed relief to residents.

“At this moment, it is very bad for all our citizens.

“I would support such a move and the UDM would support such a move.”

Bobani said tariffs should not be increased for the 2020/2021 financial year.

“You can’t even increase a tariff by 0.1%. We are in the midst of a war.”

EFF regional chair Ngawethu Madaka said his party would write a letter to the municipality demanding a payment reprieve for residents affected by the lockdown.

“The EFF is going to demand this.

“If the banks can do it, the municipality must realise it is possible.

“People are simply not getting money.”

Madaka said such a reprieve would help businesses.

“This is something that should have been implemented a long time ago.”

He said the party would not support any tariff increases.

“It will take a long time for the city to recover from this virus.

“We should assist by taking some of the burden off of our people.”

PA councillor Marlon Daniels agreed that a payment reprieve should be in place, but only for those whose livelihoods were affected by the lockdown.

“It should not be a blanket approach,” he said. 

“There are people like myself who are still getting paid.

“I have not been adversely affected when it comes to my income.”

He said residents and businesses should prove they were earning less, by submitting supporting documentation, before receiving a reprieve.

He also said tariffs should not be increased for the 2020/2021 budget.

“We need to give people a chance to get back on their feet.

“An increase in tariffs won’t assist anyone. We have to be sensitive.”

ACDP councillor Lance Grootboom said the city’s collection rate had dropped, which showed that people were struggling and a payment holiday was needed.

Grootboom said he was aware of the impact this would have on the municipality, but that the effect on residents was more important.

“The impact on residents’ livelihoods has been huge and I’m in support of any relief measures the municipality might put in place,” he said.

Grootboom said he would be against any tariff increases in the next financial year, which starts on July 1, as it would be unfair to residents.

Municipal spokesperson Mthubanzi Mniki said the collection rate for the municipality had dropped from 85.7% in January to 83.9% in March.

He said the city would be forced to go back to the drawing board in preparing its budget for the  2020/2021 to 2022/23 financial years.

“The budget assumptions for 2020/2021 to 2022/2023 were approved by council in 2019.

“Understandably, no-one at that stage could have foreseen that there was a disaster coming in the name of Covid-19,” he said.

“Now that we are aware and can experience the struggling economy of SA, as demonstrated in our case by the recent poor collection rate, this definitely means that the 2020/2021 to 2022/2023 budget has to be completely overhauled.

“However, the sad part of any decision taken resulting from this would mean there are certain critical projects that may have to be curtailed, or even vacancies that may have to be frozen altogether, which will not go down well with service delivery directorates.”

He said any decision on the budget or curtailment of projects had to be made by the council.

“Nothing can be implemented by the administration without the resolutions of council,” Mniki said.