The evidence shows that Cape Town is delivering the most for the poor in South Africa

26 April 2023

COUNCIL SPEECH: 26 April 2023

Madam Speaker,

Fellow City of Cape Town Councillors and Team Cape Town officials,

Guests and members of the public,

Goeiemôre, molweni, as-salaamu alaikum, shalom, good morning

Eid Mubarak!

Friends,

Often, when people celebrate the work that Cape Town is doing to build a City of Hope in South Africa, that celebration is accompanied by a "but".

And that "but" is usually followed by some variation of the perception that Cape Town – and by extension the party that governs Cape Town, the DA - does not serve the city equally, or favours some communities over another.

I have of course come across this many times, and was struck again by how powerful this perception is this past weekend, through two pieces of communication.

First, a Pastor who leads a big church in Jo'burg, Pastor Chris Mathebula, who will be known to many of us and who is a significant leader in Christian society, tweeted a congratulatory message to the City of Cape Town about his recent visit here, and the obvious difference he saw. He also celebrated the work we are doing to beat load-shedding. But he ended his tweet with a question – do the people of Khayelitsha and Mitchells Plain benefit from this work to beat load-shedding?

Now, besides the fact that of course everyone on the City's electricity grid benefits directly and indirectly from the work we are doing to end load-shedding, I understood the broader point that Pastor Mathebula was making – another variation on the perception I spoke of earlier.

Then, the Sunday Times carried an edited speech given by Dr Sipho Pityana at the University of the Free State, on the occasion of his being awarded an honorary doctorate by that University. In his speech, he asserts matter of factly, a more blunt, unvarnished version of this view.

In fact, I was so taken aback by his view that I had to contact him to check if it was really what he said. He confirmed that it was.

I use these recent examples by way of introduction, because today I'd like to change things up a little, and use my speech to address this head on.

Our ambition is clear.

We are building a City of Hope for all our residents, no matter where they live in Cape Town, and no matter their background.

Our higher purpose for being in politics and seeking to govern is precisely to lift people out of poverty and give them better life chances, because poverty robs people of dignity and freedom.

We know there are still many, many people still living in poverty in South Africa and in Cape Town, and many of these fellow residents live in incredibly tough conditions.

Those conditions are made much worse when the state – on whom the poor rely much more than others – fails them in so many basic ways:

fails to keep them safe,
fails to provide conditions for a growing economy that offers the only path out of poverty,
fails to pay social grants on time or renew people's social grant cards, and
fails even to keep the lights on

I know we have a long way to go – while poverty and unemployment are slowly ticking down in Cape Town – none of us can possibly be satisfied seeing the depth of poverty etched onto the faces of struggling mothers and grandmothers, or meeting young fathers who can't find any work, or seeing families who have lost loved ones to violence.

We feel deeply the responsibility and weight of doing all we can - working harder, investing more, pushing for more powers – so that we can better improve these living conditions, and make this a more inclusive and more caring city.

While we do that, I am also truly proud of what Cape Town does to care for our poorest residents, and deliver better basic services to give them greater dignity even in the midst of poverty.

I am deeply proud to be part of a government, and a member of a team, who delivers functional, successful, forward-looking, public-serving, clean government in South Africa, a country where that is vanishingly rare.

We must also hold ourselves to high standards. We want to be exceptional, and we want to set the bar for excellence. So it is helpful to have the opportunity to compare and contrast what we are doing, with what the other major cities in South Africa are doing, as far as it relates to basic services for the poorest residents specifically.

We have that opportunity now, because all of the country's metros have now tabled their budgets, and I spent much of the last couple of weekends reading them all.

I'd like to share with you some of the results of that analysis today.

You will recall from our own budget tabling, that we in Team Cape Town are proposing the most ambitious infrastructure investment pipeline ever undertaken by this City, while also considerably strengthening the safety net of care and relief for our poorest fellow Capetonians.

In this way, we aim to position Cape Town for economic growth that helps more people into work, and builds towards the vision of a City of hope for all.

When tabling this budget last month, we did not yet have the perspective of all other metro budgets, which now make for some stark comparisons.

The evidence clearly shows that Cape Town is delivering the most for the poor in South Africa.

In support of that statement, I offer three pieces of comparative evidence: investment in basic infrastructure, care for the poorest residents, and value for money for all families.

Investing in infrastructure

We might not be South Africa's biggest city by population or territory, but Cape Town has tabled by far the biggest capital budget of all metros at R11bn.

Our infrastructure budget is 35,2% larger than the next metro, eThekwini (R8,1bn), and 59,7% larger than the third biggest budget for 23/24, Johannesburg (R6,9bn).

On a per person basis, Cape Town will over the next three years spend 145% more on infrastructure than Joburg – SA's most populous city.

Cape Town's infrastructure budget is close to double the City of Jo'burg's over the medium-term. When one looks at the 3 year infrastructure commitments of all of the major metros, you can see in a single picture why services in many places are suffering, along with residents who rely on those services.

In fact, we will invest more on infrastructure than Johannesburg and Durban combined, with a 91,2% larger capital budget than Joburg (R43,2bn vs R22,6bn), and 116,9% larger budget than eThekwini (R19,9bn).

Our pledge to residents was to raise the ambition of infrastructure investment so that we could do the basics better, and deliver more dignity for the poor.

We have done, and continue to do exactly that.

Besides the improvements to basic services, and personal and community dignity, the scale of our infrastructure pipeline will create an estimated 135 000 jobs in the city.

Now let's consider where this investment takes place.

In this year, we have worked out that roughly 73% - or just over R8bn - of Cape Town's R11bn capital budget goes towards critical infrastructure benefitting lower-income communities, informal settlements, and poorer communities in our city.

In many cases this expenditure benefits lower income households exclusively – such as with subsidised housing, new social housing projects, and informal settlement upgrades.

And this is particularly true of the investment we are making in water and sanitation improvements.

All of us who work daily in Mfuleni, Delft, Kalkfontein, Wallacedene, parts of Mitchells Plain, parts of Steenberg, DuNoon, Khayelitsha and elsewhere, know what problems we have with the capacity and age of our sewer network.

We are making big increases where it counts, including a 226% increase in water and sanitation spending over three years.

Over R750 million will go to the Cape Flats and Philippi main sewer upgrades, making a direct and meaningful difference in the lives of those residents.

So too with our campaign to quadruple sewer pipe replacements, which is already performing ahead of target, and over R600 million for upgrades to sewer pump stations overwhelmingly in poorer communities, with the most major upgrade at the massive Langa pump station.

So too with our multi-billion rand upgrade to Zandvliet Wastewater Works, serving the community of the greater Khayelitsha and surrounds, Potsdam serving Du Noon, the Macassar Wastewater Works, and the Athlone Wastewater Works.

Similarly, when we deploy new officers, new cameras, new drones, new vehicles, all to make the whole of Cape Town safer, the communities getting the lions share of these resources are overwhelmingly poorer communities which are often the most crime affected.

And these investments are paying off, particularly in those afflicted communities. Just in the last week, our City officers have made drug and firearm busts in Manenberg, Nyanga, Browns Farm, Philippi, Borcherds Quarry, and Heinz Park.

We are steadily making a difference, and importantly we are doing this together with communities and dedicated neighbourhood watch members. And, I would like to just pause a moment to acknowledge one such stalwart, Bradley Solomons of Hillview Guardiens Neighbourhood Watch, who sadly passed away this week.

Speaker, our infrastructure investments of course in some cases benefit both lower and higher income households together – such as our multi-billion rand projects to increase our city's water security by drilling for new water at the Cape Flats or at Atlantis, or building a new water recycling plant at Faure.

Despite Cape Town's unrivalled investments in this critical infrastructure that serves the poor overwhelmingly, Cape Town has the second lowest tariff increase for water in the country.

Similarly, in public transport, our N2 Express service to Mitchells Plain and Khayelitsha is now the busiest route in the whole city, and anyone who has travelled that route knows that our service is clean and safe, and delivers a world class public transport service to commuters from these two communities.

The MyCiti expansion to Mitchells Plain and Khayelitsha has now broken ground. It is made up of several 'work packages' or sub-projects, but taken as a whole, it is the biggest infrastructure project in the city, and in the whole of the Western Cape.

And it is squarely to provide better public transport for those who need it most, and to continue to unstitch the spatial legacy of apartheid in our city.

But it doesn't stop there. The year ahead sees upgrades to clinics for better waiting spaces, new waste trucks and community drop off facilities, a new waste project to improve waste collection services for backyard dwellers specifically, more electrification in informal settlements, and more and better trading infrastructure for informal traders.

Put simply, Cape Town is squarely and unashamedly focused on delivering better and more dignified services to our poorest residents and communities, and the data shows that this is true moreso than in any other metro in the country. That is incontrovertible.

Care for the poor and vulnerable

But our commitment goes beyond better services.

We also provide a social safety net of indirect financial support for those who are struggling the most.

Again, it is helpful to compare directly, and from the data, what we are doing to care for the poor with what is being done elsewhere.

A full 40% of households in Cape Town receive water and sanitation services free of charge, much higher than Gauteng's 29% of households, based on the recent Stats SA non-financial census of municipalities (which ironically presents its results by province, not by municipality, which means I can't break it down).

And, while leading SA's cities on investments to end load-shedding, Cape Town has still been able to reduce Eskom's massive 18.49% tariff increase to 17.6% for residents, absorbing as much of the increase as possible at a cost of about R15 million per month, or R180 million per year.

To be clear, that is a direct saving to every household on the City's grid.

But the biggest difference to the pockets of struggling families in Cape Town will be made by the changes we've introduced this year to the lifeline electricity tariff. They will receive special protection, paying 50% less than they used to pay for electricity in the 350 – 450 unit monthly usage band. This amounts to R1,84 per unit, instead of R3,71 without City protection.

Compare this, for example, to electricity tariff hikes in eThekwini, where the increase will be 21,91%.

There is a curious silence about this from those who question Cape Town's commitment to protecting the poor from tariff hikes.

The fact is that Cape Town is protecting residents from load-shedding, and protecting them from higher electricity prices.

In total, we've tabled a R4,3bn social safety net for lower-income households.

No other metro offers a more comprehensive support package all the way up to a property value of R450 000, including:

100% rebate for property rates and refuse removal
15kl free water and 10,5kl free sanitation, SA's highest allocation
Up to 60 free electricity units

No other metro offers the first R450 000 of property value rates-free for all properties under R5m in value.

Only Cape Town does that.

No other metros have raised the pensioners income qualifying limit to R22 000 a month, meaning pensioners get more rebates here than in any other metro.

Only Cape Town has done that.

Some metros provide indigent relief based on household income, and not on property value, and others on property value alone.

Cape Town does both.

We provide 100% free rates and services for properties under R450 000 in value. And we provide 100% free rates and services for families earning under R7500 monthly income.

On both measures, whichever you choose, we offer more than any other metro.

By comparison, in Nelson Mandela Bay Metro, there is no property value inclusion, and a income limit inclusion of only R4000 per month. In Johannesburg, R6000 per month.

In Cape Town, R7500 per month.

Speaker, in every category of support for the poor, even taking account of different methodologies in different cities, Cape Town is doing the most to care for the poor on every score:

We have the highest free water allocation
We have the highest free basic electricity units
We have the highest property value inclusion threshold
And we have the highest household income inclusion threshold

Speaker, the evidence is therefore clear, that Cape Town's foundation of good governance is enabling us to make unrivalled investments in the future, while also strengthening the safety net for the vulnerable.

Fairness for Ratepayers

We are delivering better services for the poor, and we are caring more for the poor, and we are doing this with the utmost care and respect for ratepayers.

Indeed, I would like to take this opportunity to thank our ratepayers who enable us to subsidise services for the poor and vulnerable of our city.

We are working together to create a shared future for all – regardless of race or economic background.

Here in Cape Town residents can feel assured that we are delivering for the poor, building hope for the future, and doing it while ensuring fairness for ratepayers.

That much is evident based on a direct cent-in-Rand rate comparison with other metros.

Cape Town is SA's metro with the lowest rates for both commercial and residential properties in 2023/24.

Commercial property rates are 35% lower than Johannesburg (0.014742 vs 0.022689 c/R), and 54.6% lower than eThekwini's 0.032473 c/R.

On residential property rates, Cape Town's 0.006273 is 31% lower than Johannesburg (0.009076 c/R) and 51% lower than eThekwini (0.012890 c/R). And this year, eThekwini has increased rates by 9%.

Good governance

Speaker,

One may well ask, how does Cape Town afford to do this?

The answer is simple.

With good government, the state can afford to spend more on the poor over time.

Good governance attracts confidence, confidence attracts investment, investment means revenues swell, allowing for rates to stay reasonable while still spending much more on better services and more infrastructure.

That is how government finances are supposed to work.

Imagine what we could fund for the poor in South Africa if we had good governance nationally.

This year, South Africa will spend R366.8 billion simply paying the interest on our national debts.

That means we are spending more than five times the total annual budget of Cape Town, paying for nothing more than the interest on our massive debt bill.

With that we could easily fund a Basic Income Grant that could deliver dignity to so many people living in poverty. We could fund so much more infrastructure across the length and breadth of our country.

But poor choices and bad governance means our national state cannot afford any more support for the poor.

In contrast, good governance here means services work and direct support for the poor goes up, while taxes remain reasonable.

That is what Cape Town is doing.

Collapse of national services

Speaker, having set out that comparison, I turn now to what more must be done.

We are building a City of Hope for All in Cape Town – investing in infrastructure for the future, protecting ratepayers from high increases while caring for the poor and vulnerable.

But the truth is we want to do much, much more. And the only thing stopping us is the collapse of vital services in our city that are still run by national government.

So many of our most vulnerable residents – from the frail, to the elderly, to mothers with small children – are being let down by SASSA's handling of their social grants.

As the post office closes more branches due to bankruptcy, many residents are left without any nearby service points to renew their SASSA cards, or to resolve compliance issues blocking payment of their grants.

The City has been opening community halls and sub-council offices across the metro for SASSA to assist the public. We are doing what we can under difficult and often chaotic circumstances – through providing venues, help with queue management, and raising awareness of these service opportunities amidst a lack of clear communication from SASSA.

We will continue to offer our full support to help SASSA reach residents most in need. We will do everything possible to help with these interim measures, but national government must take action to stabilise the social grants service for the sake of millions of citizens.

This includes extending the time for card renewals, cutting red tape to resolve grant compliance issues, and ensuring that service points are available close to where people live. Part of this solution must include a saving grace for the post office, in the form of private investment, to keep this critical service afloat.

We are concerned that the state of SASSA is not at the top of the agenda for Social Development Minister Lindiwe Zulu or President Ramaphosa, with nothing but silence from their offices, despite the growing desperation on the ground.

Our country, and its poorest citizens, cannot afford a collapse of the social grant payment system. The shortage of local SASSA service points in vulnerable communities is compounded by the collapse of the proud passenger rail system run by the national government.

The lack of a safe, reliable, and affordable rail service is currently costing lower income households R932 million a year in increased transport expenses, and opportunity costs.

According to its own data, PRASA now only transports 3% of the passengers it did a decade ago nationally, when rail should be the backbone of an affordable, reliable, and safe transport system.

By contrast, we estimate that a functional rail service in Cape Town will also sustain over 50 000 jobs directly and indirectly, and add R11 billion to the local economy each year, which is a full 4% of the city's annual Gross Domestic Product (GDP).

These findings form part of our ongoing Rail Feasibility study, which will guide the devolution of passenger rail to the City.

It is clear from this data that our dysfunctional rail system causes a massive financial burden to low-income households, and is a major economic drain on our city.

President Ramaphosa must surely agree that we need to lift the unnecessary and cruel R932 million annual burden from the shoulders of low-income households – and that we must do this without delay.

There is a compelling and urgent need for National Government to devolve Cape Town's passenger rail for the City to run, and for President Ramaphosa to keep his State of the Nation promise of "solid progress within a year".

The City stands ready to get the trains running in the interest of all residents, just as we are working steadily to reverse the decline in other national services, such as electricity supply and policing.

We do so not because we want to run the trains, or electricity, or policing for their own sake – but because we want to improve the lives of our residents. And we know they can't afford to wait around for solutions that are never coming from this national government. If they are to be fixed, then they will be fixed by us, here.

So, Speaker, here are the facts: The City of Cape Town, run by the Democratic Alliance, is the single most pro-poor government in South Africa.

That is the truth about the DA and about Cape Town, and it is time to tackle head on those who peddle the story that we don't care about the poor.

There is no other place in this country that spends as much, does as much, and cares as much about the plight of the poorest South Africans as this city and the party that runs it!

If we ran South Africa like we run Cape Town, then mass unemployment would be a thing of the past.

If we ran South Africa like we run Cape Town, then poverty would be wiped from the face of this country in a generation.

That is the truth, already known and confirmed in the lives of those who fill our buses to come to work each morning, who know that when they call someone will answer to help, who see the projects in their streets and who see the cranes in the sky, and who can have at least the comfort of knowing that here they have a government who cares about them

That is the truth, and it is time to start telling it!

I thank you

END

Published by:
City of Cape Town, Media Office