The South African Chamber of Commerce and Industry (Sacci) is concerned about electricity tariff changes and the costs of doing business at a municipal level.
Sacci CEO Neren Rau says: “Sacci calls upon government and stakeholders to review the structure of local government administered costs against the impact on the cost of doing business.
“Electricity tariff charges are used to fund municipal services beyond electricity usage, and the expense of electricity infrastructure maintenance present a critical case for a discourse on municipal financing.
“This matter arises from growing concerns expressed by SACCI’s countrywide regional chamber network,” he says. “The fundamental point is that the Business community needs to derive reliable energy supply, functioning infrastructure and predictable cost increases with reference to inflation.
“A related issue is the impact on fiscal discipline arising from the conventional cross-subsidisation model used by municipalities that raises revenues through steep electricity tariffs for other municipal expenses,” says Rau. “This model, coupled with a host of other rising input costs, imposes a heavy direct and indirect financial burden on SMEs.
“At issue too, is the fact that municipalities would be forced to increase other charges if cross-subsidisation was no longer permitted. The fiscal structure of local government funding needs to be reassessed in order to prevent an escalation of municipal costs that severely constrain business competitiveness and limit job creation, and to improve fiscal discipline and transparency.
“Sacci intends to actively pursue this matter with the Minister of COGTA toward an equitable solution,” Rau says.
