Underlying problems that the administration of electricity at the local level had been made far too complicated and onerous, it says. Picture: Matthews Baloyi
The Pietermaritzburg Economic Justice and Dignity Group (PMBEJD) yesterday called for a universal approach with a uniform electricity tariff across the country; underlying problems that the administration of electricity at the local level had been made far too complicated and onerous with the myriad of different tariff scales and differentiating between the deserving and undeserving poor proving extremely difficult to manage and largely out of control, it said in a statement.
In its assessment of the impact of the 12.72% tariff hike on the basic food basket implemented by municipalities at the beginning of July, the group said affordability studies prior to tariffs being passed have never found traction, and the free basic electricity policy had mostly failed, as has cross-subsidisation.
It argued that it would be possible to implement a blocked tariff structure: a three-tier system of free electricity, cheap electricity, and reasonably priced electricity for high-volume, consumers which could be uniformly priced across the country.
“Municipalities can forgo administratively burdensome and dehumanising means testing, do away with indigent policies and instead apply the principle that it is good for all of us to have access to safe and sufficient energy. Area-based targeting can be employed via rates registers to segment populations of high-volume consumers (if necessary) from the majority of households whose financial reality is that they can afford zero or just a very small amount,” it said.
It said though the National Minimum Wage (NMW) for the 2024/25 term was increased by R362.88 a month from April, workers should reasonably expect the annual increase on the NMW to cover inflation on all their basic expenses required to care for their families and allow them to be productive in the workplace.
The electricity increase, however, might remove R136.05, or 37.5%, from the total increase of R362.88 (cutting it to an R226.83 monthly increase), and erode it from an 8.5% annual increase to a low 5.3%.
For workers on the NMW, while technically they might be able to absorb the electricity hike, PMBEJD said it was unlikely that after absorbing the increase that enough money would remain to absorb the higher costs of food, upcoming transport increases; and all the other basic inflationary increases on expenses.
Expenses included schooling, domestic and hygiene products, cellphone data, for example, which was required to maintain a functioning household and a productive worker.
It said the annual electricity tariff hikes, which for years have been unaffordable – acted to undermine the NMW as an instrument of improving equity in wages, dealing with historical wage injustice, and improving the lives of South African workers and their families.
The Living Wage South Africa Network (LWSAN) said PMBEJD’s call strengthened the case for a National Living Wage, as data collected from working individuals across South Africa between November 2023 and January 2024 established that workers require at least R15 000 per month if they were to live a decent life.
Spokesperson Professor Ines Meyer said the living wage was one that was sufficient for a worker to provide themselves and their family with the basic necessities of life and save something for the future or to cover unforeseen emergency expenses, different from the national minimum wage that employers are legally compelled to pay their workers but which rarely satisfies their fundamental needs.
By contrast, employers were encouraged to offer a living wage voluntarily.
Meyers said encouraging developments in the lobby for the Living Wage included the National Wage Commission (NWC) re-description in its Medium-Term policy statement of the living wage along the same lines of the campaign and the the International Labour Organisation (ILO) passing a resolution this year that the living wage as opposed to the minimum wage become standard practice in the workplace.
BUSINESS REPORT
Related Topics: