Cape Town’s R87.8 billion draft budget for 2026/27 has triggered a backlash from residents, opposition parties, and civil society organisations who say it will make the city unaffordable for working-class families.

Why it matters: Cape Town is governed by the DA, which holds it up as a model of competent local government. If its budget is seen as punishing the households it claims to serve, the political damage could extend well beyond the city ahead of local government elections later this year.

The tariff increases

The electricity fixed charge, paid by all residential customers regardless of consumption, has climbed from R219 per month in 2024/25 to R369 for 2026/27. That is a 68% increase in two years. For households on prepaid meters in lower-income areas, this charge alone can represent a significant portion of their monthly electricity spending.

Property rates are also contentious. Rising valuations across the city mean ratepayers will collectively pay nearly R1 billion more this year. The city has proposed reducing the rates-in-the-rand formula to offset the effect, and says 60% of homeowners will see their rates stay the same or decrease.

The city’s defence

Mayor Geordin Hill-Lewis has promoted the budget as the most comprehensive relief package the city has offered struggling households. It includes a record R40 billion three-year infrastructure investment programme covering water, sanitation, roads, and electricity networks.

The city also points to expanded indigent relief and a higher threshold for free basic services. Officials argue that comparing the fixed charge in isolation ignores the broader tariff structure, which they say remains competitive nationally.

The criticism

A municipal public law expert at Stellenbosch University said the city has a constitutional and statutory duty to ensure its tariffs do not push households into poverty. Critics argue the budget details were buried in 39 separate annexures, making meaningful public scrutiny difficult within the comment period.

A separate debate has erupted over a R39.5 million annual subsidy for Cape Town Stadium, which opponents say is difficult to justify while essential services face cost pressures.

What happens next

The budget is open for public comment until May. Council will vote on the final version in June. The outcome will signal whether the DA-led metro can hold its coalition of middle-class and working-class voters together heading into elections.