The Independent Municipal and Allied Trade Union (IMATU) will join together with organised business, other trade unions and civil society organisations in opposition to Eskom’s proposed electricity tariff hikes of 16% per year for the next 5 years.

“As demonstrated by our negotiators throughout last year’s local government sector wage negotiations, household electricity prices are a key inflation driver in our economy. The proposed double digit increase will not only mean less disposable income in our members’ pockets, but the knock on inflationary increases equate to an overall increase to the costs of living and probable job losses,” stated IMATU Deputy General secretary, Craig Adams.

Electricity is a key input in important sectors of the economy such as manufacturing and mining. It is also a significant cost for small to medium enterprises (SMME).

“During the current global economic recovery, many companies, organisations and individuals are struggling to keep financially afloat in South Africa.  IMATU cannot condone a well above inflationary increase in the price of electricity every year for the next 5 years. Workers are consistently told by their employers that an annual 6% salary increase is sufficient to cover their increasing costs of living; yet Eskom is expecting individuals to pay above inflation prices. These increases will not only affect rate payers, but will also have a significant impact on the poor and unemployed in the form of increased goods and services prices,” commented Adams.

IMATU is very concerned that higher electricity prices will lead to job losses. Higher electricity prices mean increases to the costs of doing business. These proposed increases will have a direct impact on small, medium and large business, which have historically retrenched workers in order to maintain profits and sustain additional operating costs.

“It is also important to remember that Municipalities are allowed to request an additional percentage over and above the increases granted to ESKOM, to cover administrative, infrastructural and collection costs. Therefore the real increase to the consumer is expected to be far more than the 16 % increase currently proposed by ESKOM,” concluded Adams.