Kwanalu sues ministers and municipalities over unrealistic property rates

The KwaZulu-Natal agricultural Union’s has lodged arguments with the High Court in Pietermaritzburg and papers have been served on the national minister of local and provincial government Sicelo Shiceka and 28 other respondents, amongst them the finance minister, the provincial and national agriculture ministers, the provincial MEC for local government and traditional affairs and 21 municipalities in KwaZulu-Natal that have begun implementing the Municipal Property Rates Act.

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The KwaZulu-Natal agricultural Union’s (Kwanalu) legal challenge against government and municipalities for their implementation of the Municipal Property Rates Act (MPRA) is now in full swing.
Kwanalu has lodged arguments with the High Court in Pietermaritzburg and papers have been served on the national minister of local and provincial government Sicelo Shiceka and 28 other respondents, amongst them the finance minister, the provincial and national agriculture ministers, the provincial MEC for local government and traditional affairs and 21 municipalities in KwaZulu-Natal that have begun implementing the MPRA. Kwanalu’s case is supported by affidavits from Agri SA.
Kwanalu president Robin Barnsley stressed that the legal action had nothing to do with a desire not to pay rates, but rather with wanting to pay rates that were “reasonable and sustainable”. He said that at the heart of the issue was a failure to appreciate the vulnerability of commercial agriculture. “We want to see rates capped at a maximum level of 0,5%, which would make them economically sustainable for agricultural and forestry properties,” he explained.
Barnsley said they were acting in terms of Section 16 of the Property Rates Act, which states that a municipality may not impose rates that impact adversely on the mobility of goods across the country, or the economy.
To support their case, Kwanalu’s rates task team completed a case study, distributed to stakeholders, which examined the financial data of the sugar and forestry industries, as well as a number of dairy enterprises and certain mixed farms across the province over an eight-year period.
The study indicated that farm income was highly erratic from one year to the next and profits were made in only 40% of the period analysed. On a weighted average, across all enterprises and years, the study revealed that instead of being able to afford to pay property rates, each enterprise needed an annual subsidy of R144 000 just to break even.
“On the strength of this evidence, we request the minister to introduce legislation which caps the rates on agricultural properties at a maximum of 0,5% before the application of rebates,” Barnsley said.
“The Act is clear in Section 3(4) that when considering exemptions, rebates and reductions on properties used for agricultural purposes, a municipality must take into account the extent of services provided by the municipality and the extent to which farmers contribute towards the economy, as well as the socioeconomic and political objectives of the municipality. While the Act says municipalities must give rebates to farmers, they are not doing so.”
Respondents have until 18 May to respond. “Once we see the nature of their responses, we’ll consider further action,” Barnsley said. – Robyn Joubert