Your Rates, Your Voice
Mossel Bay’s property rates and fixed electricity charges have doubled within a short period, significantly outstripping both inflation and household income growth. This rapid escalation is largely driven by tariff decisions that prioritise raising revenue over cost-reflective and equitable charging.
While infrastructure investment is necessary for long-term development, relying heavily on aggressive rate and tariff hikes places undue financial pressure on residents — particularly those on fixed incomes and households experiencing economic stress.
A combination of factors has contributed to unsustainable cost increases:
Tariff hikes well above inflation: Recent increases in fixed service charges are far greater than typical cost growth, placing cumulative burden on ratepayers.
High profit margins in basic services: Some basic services, like waste removal, are priced with high surplus margins, suggesting revenue extraction rather than cost recovery.
Application of VAT on non-consumption charges: Charging VAT on fixed or profit components effectively taxes residents on services not directly consumed, raising legal and equity concerns.
Heavy reliance on existing ratepayers: Instead of diversifying revenue sources or improving efficiency, the municipal model increasingly depends on extracting more from current residents. 48% of ratepayers are not able to pay a full municipal account and have to rely on subsidy
These practices diverge from key tariff principles such as cost reflection, fairness, and sustainability, which are foundational to municipal financial policy. Municipal tariff policy requires services to be sustainable, equitable and compliant with legislation.
Unsustainable rates and tariffs have tangible consequences:
For Households:
Many ratepayers face financial stress as bills grow faster than salaries and fixed incomes.
Affordability pressures reduce disposable income and can undermine local economic participation.
For Businesses:
Operating costs increase with utility and municipal charges, reducing competitiveness and potential growth.
For the Municipality:
Higher charges do not necessarily improve revenue collection; in Mossel Bay nearly half of ratepayers are unable to pay their accounts in full, worsening arrears and collection efficiency.
Unsustainable revenue practices can create a feedback loop where rising costs drive non-payment, which in turn prompts further increases to balance budgets — a cycle observed in various distressed municipal environments.
When tariffs and rates increase rapidly without clear cost justification or transparency, it raises governance and financial risks. These include:
Weak linkage between charges and cost drivers — making it harder for ratepayers to understand or trust the basis of increases.
Potential misalignment with Municipal Systems Act and Municipal Finance Management Act principles, which require tariffs to reflect actual service costs, affordability, and transparency.
Pressure on municipal finances from uncollected revenue leading to budget shortfalls, higher borrowing, or deferred maintenance — patterns seen in financially stressed municipalities across South Africa. moonstone.co.za
In this context, effective financial management is not just technical; it is essential to sustainable service delivery and community confidence. SA Cities
The current trajectory of rates and tariff increases in Mossel Bay raises serious concerns about affordability, sustainability, and governance. Ratepayers are entitled to transparent cost justification, independent oversight, and tariff policies that reflect actual service delivery costs rather than revenue extraction.
MossRates advocates for:
Full cost transparency and tariff justification
Independent ratepayer oversight and public reporting
Reform of specific tariffs, including waste removal cost structures
Caps on annual tariff growth linked to inflation
Efforts to validate and recover financial losses (e.g., reducing leaks, improving billing accuracy)