The Organisation Undoing Tax Abuse (OUTA) says it believes the City of Cape Town’s proposed drought levy is the result of failed cooperative governance and a lack of the City’s ability to hold national authorities to account.

The City of Cape Town tabled the proposed drought levy to Council last year, pointing out that the charge was needed to make up the deficit in its revenue which has come about due to reduced consumption and residents paying significantly less for water and sanitation.

However, Julius Kleynhans, the organisation’s Portfolio Manager for Water believes the failure of cooperation between the City and the national Department of Water and Sanitation has given rise to the City having to resort to a fiscal ‘self-help’ process.

“We believe this has serious unintended consequences and sets a dangerous precedent for future governance on this matter for other municipal revenue generating ‘opportunities’,” he notes.

Authorities should be held accountable

While the City’s proposed water projects may help alleviate the current crisis, OUTA says its concern is that the City’s proposed drought charge does not address the assigning of correct funding responsibilities and obligations to different tiers of government.

“Hitting the ratepayers may be the easiest short-term solution, but we do not believe it is the legally or morally correct one. Holding those authorities who are responsible for water supply to account is the correct route to follow,” Kleynhans explains.

City should act to ensure delivery by the department

The organisation is urging the City to engage the Western Cape provincial government and the Department of Water and Sanitation in finding realistic and long-term solutions.

“We believe that ultimately, the legal responsibility for ensuring a bulk water supply for the City is the responsibility of the Department of Water and Sanitation and that the City should thus act without delay to ensure delivery by department.”

“Setting up a new municipal tax or surcharge requires a clear legal process, which the City does not appear to have followed. We are also not convinced, on the basis of the available information, that this is an equitable way of paying for the necessary services,” concludes Kleynhans.