Rates and Fixed Charges Are Outpacing Reality

Household Costs Are Rising Faster Than Incomes

Over the past three years, municipal rates and fixed charges in Mossel Bay have increased by more than 100%, while inflation has averaged approximately 4.5% per annum.

Over the same period:
• state pensions increased by approximately 2.9%;
• municipal employment costs rose by an estimated 7–8%.

For households, pensioners, and small businesses, this divergence is not sustainable.

Most incomes and revenues broadly track inflation — not tariff increases that grow at multiples of income growth. When municipal charges outpace earnings to this extent, affordability erodes and financial pressure becomes unavoidable.

The Affordability Impact Is Predictable

When costs rise faster than the ability to pay, the outcome is consistent:

• disposable income declines;
• financial stress increases;
• arrears begin to rise;
• trust in municipal decision-making deteriorates.

This impact is most severe for pensioners, low-income households, and vulnerable residents. These groups cannot absorb sudden increases, nor can they increase income to offset them.

What begins as a tariff issue quickly becomes a broader social and economic concern.

Why Are Existing Ratepayers Carrying the Burden?

Rather than relying primarily on natural revenue growth from expanding development, Mossel Bay has increasingly depended on higher rates and fixed charges applied to existing ratepayers.

This raises important concerns around fairness and sustainability.

Mossel Bay has historically benefited from:
• strong property market growth;
• expanding residential developments;
• a significant base of second homes and holiday properties.

These factors should strengthen the revenue base. Yet the current trajectory suggests that existing ratepayers are carrying a disproportionate share of the financial burden.

A Fair and Practical Baseline: Link Increases to Inflation

Aligning municipal increases with inflation is not restrictive — it is a widely accepted principle of fairness and predictability.

South Africa’s inflation framework operates within a 3%–6% range, with a midpoint of approximately 4.5%.

Inflation-linked increases provide:

• predictability for households and businesses;
• a stable planning framework for the municipality;
• alignment with real income growth;
• reduced risk of escalating non-payment.

With continued growth in the municipal base, there is scope to maintain financial sustainability without imposing excessive annual increases.

A Practical Framework to Restore Balance

MossRates proposes the following:

• Cap annual municipal increases at the inflation midpoint (±4.5%);
• Require clear public justification for any deviation from this benchmark;
• Ensure meaningful consultation within the IDP and budget processes;
• Strengthen revenue growth through an expanding and properly structured rate base;
• Avoid funding long-term or non-core projects through recurring tariff increases;
• Improve enforcement and governance practices to ensure fairness across all ratepayers.

This approach supports both financial discipline and long-term sustainability.

A Choice: Stability or Escalation

Across South Africa, communities are increasingly challenging excessive municipal increases. The pattern is clear — where affordability is ignored, resistance grows, arrears increase, and trust declines.

Mossel Bay has the opportunity to take a different path by aligning increases with economic reality and maintaining its reputation as a well-managed municipality.

The Bottom Line

MossRates calls for all future municipal increases to be aligned with inflation.

Where additional funding is required, this must be addressed through:
• transparent consultation;
• proper financial planning;
• sustainable funding mechanisms — not recurring blanket increases.

Mossel Bay is a growing and economically active municipality. With an expanding revenue base, there is no justification for cost increases that effectively double household burdens within a short period.

Protect affordability.
Restore balance.
Ensure sustainability.