Cape Town tariff case was not ‘irresponsible’ — here’s why we did it.

In the weeks since the Western Cape High Court declared the City of Cape Town’s fixed cleaning, water and sanitation charges unlawful and invalid, the City’s leadership and its defenders have repeatedly asserted that the South African Property Owners’ Association (Sapoa), the Cape Town Collective Ratepayers’ Association (CTCRA), AfriForum, the Good party and the SA First Forum were irresponsible to bring or support this case, that no workable alternatives were offered, that the poor will pay the price and that the judgment has set back a vital national programme to reform municipal finances.

We have heard this characterisation with concern, and would like to offer a different account, with an open offer to partner with City in the work that lies ahead.

The court’s finding was unanimous. A full bench of three judges, led by the judge president, declared the City’s new fixed tariffs unlawful and invalid. The City’s counter-application, which sought to have parts of the Municipal Systems Act declared unconstitutional rather than to revisit its own tariff design, was dismissed in its entirety. Costs were awarded against the City. This is not a narrow procedural setback, it is a comprehensive repudiation of the City’s new approach.

It is worth recalling who warned the City that its new tariff structure was unlawful, and when. The Department of Cooperative Governance and Traditional Affairs clearly rejected this approach in 2018, long before the 2025/26 budget was adopted. Sapoa engaged the City for months in good faith, in an effort to avoid litigation. The CTCRA, representing 45 ratepayer associations across this metro, made detailed submissions during the public participation process, outlining the legal concerns with the fixed charges. The Good party, SA First Forum, AfriForum and more than 14,000 individual residents recorded their objections. We mention this not to assign blame, but because it bears on the question of responsibility: the City did not lack for early, considered counsel that the proposed structure might not survive judicial scrutiny.

A year has, regrettably, been lost. Ratepayers have been billed under the impugned tariffs since 1 July 2025 and, on the court’s order, remain liable until 30 June 2026, a situation that is causing considerable frustration among Cape Town residents. Legal fees on both sides add up to millions of rands, and the City’s own costs, and its payment of the applicants’ costs, will be borne in their entirety by the ratepayers. Officials’ time has been spent defending a position the court has now set aside. An appeal would extend the problem rather than resolve it.

Since the judgment the City has advanced a more nuanced version of its argument in favour of the impugned tariffs. It is said that this judgment hamstrings National Treasury’s Metro Trading Services Reform programme under Operation Vulindlela – the effort to ring-fence revenues for electricity, water and sanitation so that money paid for those services is spent on those services. The CTCRA agrees, unreservedly, that ring-fencing trading services is sound policy. South Africa has every reason to want municipalities to spend water and sanitation revenues on water and sanitation infrastructure, rather than have them disappear into a general operating account. But ring-fencing of revenue is a legitimate and achievable goal that does not depend on an unlawful mechanism for raising that revenue.

The court did not strike down ring-fencing. It did not strike down trading services reform. It struck down a specific design that, in legal substance, levied a second rate under the name of a tariff, contrary to the Municipal Property Rates Act and the City’s own Tariff By-law. Other instruments remain fully available in this respect: properly costed volumetric tariffs with stepped or rising-block structures, and fixed availability charges based on connection capacity (as the City itself used to apply until a year ago, and continues to do for electricity). To our knowledge, city-wide cleaning was never mentioned by Treasury as a service that had to be treated in the same way as electricity, water and sanitation. Reform of metro finances is not, and has never been, dependent on the device the court has set aside.

The suggestion that no alternatives were placed before the City is also one we must, in fairness to our members, correct. The CTCRA’s submissions, on the public record, set out a sequence of options that the City was urged to consider before increasing the ratepayer burden: a credible programme to reduce the wasteful and irregular expenditure flagged year after year by the Auditor-General; a serious review of non-rates revenue, including tourist overnight taxes; arrears recovery from the largest defaulters and the rationalisation of underused City property holdings; and a transparent, lawfully structured tariff package with the underlying cost data disclosed. Other parties made comparable proposals in their own submissions. The City is entitled to disagree with our alternatives, but it is untrue to suggest that they were never offered.

The argument that this judgment will hurt the poor also deserves a measured response. The court did not strike down cross-subsidisation. It did not strike down rates rebates, the indigent register, free basic services or the equitable share. The choice now facing the City is not, as has sometimes been framed, between the impugned tariffs and a flat charge that hits Langa as hard as Llandudno. That is a false binary. The Municipal Property Rates Act is the proper instrument for value-based contributions, and it offers more, not less, scope for protecting lower-income households than the device the court has set aside. A budget that is both pro-poor and lawful is entirely achievable. The CTCRA shares the City’s view that those with greater means should contribute more than others, and indeed, this has always been the case since this is the mechanism that is already applied with the rate-in-the-rand approach.

The CTCRA respectfully invites the City to accept the judgment rather than appeal it, sparing the public a further year of uncertainty and further legal costs on both sides. Second, to acknowledge openly that the design did not hold, and to bring forward a 2026/27 budget on a lawful footing. Third, to begin that new budget on the expenditure side, with a visible effort to constrain wasteful spending, and on the revenue side, to make a similar effort in identifying sources of untapped income, before turning again to ratepayer income. And fourth, to engage in good faith with the organisations who raised these concerns early in a proper stakeholder engagement process.

On that final point, our position is unambiguous. The CTCRA’s door is open. We represent residents from a wide variety of neighbourhoods and layers of society, including retired pensioners on fixed incomes, single-income households, body corporates in modest sectional title schemes, families whose property values have risen well beyond their earnings, and yes, those fortunate enough to live in the upscale areas of the city. While these groups are better off than those living in disadvantaged areas, they are the ones footing the City’s bill, and they have every right to engage in the process by which funds for that bill are raised. They are all Capetonians who want their City to succeed, who care deeply and would much rather be partners than adversaries, and who find the City’s characterisation of them as selfish and unwilling to contribute to socioeconomic improvement deeply distressing.

We therefore extend, in public, a sincere invitation to the mayor and the mayoral committee to sit down with the CTCRA, alongside the other organisations that raised concerns, to work together on a lawful, fair and financially sound budget for the year ahead, and on a longer-term approach to trading services reform that achieves the ring-fencing the country needs, by means the law allows. We come to that conversation without preconditions, without triumphalism and with genuine respect for the difficulty of governing a metro of this scale. What we ask in return is that the conversation begins from the facts, and from a shared determination to get the next budget right: for every Capetonian, in every income bracket, in every corner of the city. DM