Updated City Budget offers sweeping relief measures for households

Source: Supplied. Cape Town's Mayor Geordin Hill-Lewis.

Approved on Thursday, 29 May 2025, the City of Cape Town’s 2025/26 “Invested in Hope” budget follows significant public engagement and revisions prompted by widespread concern over the initial draft.

The updated budget includes substantially reduced refuse-removal charges, lower fixed water tariffs, increased support for pensioners, and a major extension of the property rates-free portion—now covering homes valued up to R7m.

These changes aim to make the City's services more affordable for a broader range of households and reflect a direct response to concerns raised during the initial public-participation process.

The most notable revisions include:

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Electricity price relief remains

Mayor Geordin Hill-Lewis said the City will continue with electricity price relief for residential customers, which will benefit households across the property value spectrum.

From July, the per-unit electricity charge for customers on the Home User and Domestic tariffs is going down. This is made possible by discontinuing the 10% cost embedded in electricity prices that previously paid for city-wide cleaning.

"We have considered the petition by the Cape Town Collective Ratepayers Association, which calls for the raising of electricity prices instead of a City-Wide Cleaning Tariff. Our modelling shows this will negatively impact households, and that it is better to pursue other means of relief," Mayor Hill-Lewis said.

The mayor emphasised that, given this positive impact of electricity price relief for households, it is important to take electricity usage into account for an accurate calculation of a household's potential total monthly bill increase.

"The reduction in the per unit cost of electricity will be especially meaningful for larger families with high consumption. For example, when using 750 electricity units in a month – and water between 10-30KL - total monthly bills for homes valued R1m – R3m will decrease by as much as -5%, up to a maximum overall increase of 3%," said Mayor Hill-Lewis.

Special ‘Lifeline’ electricity protection also continues for indigent households and pensioners. Lifeline customers using 600 units will still pay roughly the same in 2025 as they did three years ago in 2022/23.

Prioritising infrastructure

But in spite of these promising rates relief measures, Mayor Hill-Lewis said the City cannot cut or re-phase its South African-record R40bn infrastructure budget, and that the City was spending more on infrastructure than all three Gauteng metros combined, 75% of which will directly benefit lower-income households.

"There are no luxury or optional major infrastructure projects in this budget that are not urgently needed. Because we all want a city that is an even better place to live in future, it is important to be honest with Capetonians about the two paths before us," he said.

"There is the well-trodden path of decline that so many of our country’s cities and towns have sadly followed, and which is now an undeniable daily reality in the form of failing services, collapsed water systems, broken traffic lights, potholed roads, and limping local economies.

"In Cape Town, we are choosing a different path, one of a functional, successful, working city. A path of progress and a better life for all, where hope flourishes and more residents are lifted out of poverty and into work,’ the Mayor told Council.

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Dialogue, not destination

The mayor also acknowledged that it is not possible for ratepayers to bear the infrastructure burden alone, which is why the City has worked to improve governance, financial stability, and its credit rating.

"This is so that in future the City can borrow more cheaply and tap into the limited national government infrastructure sources which reward merit," he said.

The Mayor noted too that the revised budget is not a final destination but part of a continuing dialogue with ratepayers, especially as cost-of-living pressures and debates over equitable service allocation remain in the spotlight.

As a result, despite the budget’s approval, the City has taken the unusual step of reopening the public participation process once more, allowing residents to provide further comment until Friday, 13 June 2025.

This extension signals that the City remains under pressure to respond to widespread concerns about affordability and service delivery, and may be open to further adjustments.