It is well known that often a salary and wage increase could make you poorer due to bracket creep – that insidious little thing called inflation can actually make you pay more tax despite an increase.
I recall the days when artisans were paid weekly and received their wages in a brown pay envelope.
One day one of my artisans asked me to please reduce his pay by 25c an hour.
Mystified I asked why and his answer was brilliant in it’s simplicity – the recent increase he had received had bumped him into a higher tax bracket and, by reducing his wage by 25c an hour he would actually get more money out by evading a higher tax bracket.
Now when it comes to electricity we spend our lives in a muddle, a funk, a fog as we try to work out exactly how to save and reduce our bills.
The fixed and variable charges complicate things for people not able to measure and manage their consumption on an almost daily basis.
Imagine then the quandary that people in the Nordic Regions will find themselves in with the introduction of 15 Minute moving tariffs!
It must be said that the Nelson Mandela Bay Municipality (NMBM) must be worshipping at the knees of SARS’s Edwin Kieswetter as they have nailed the bracket creep manipulation game.
In a reaction to loadshedding and the scarce supply of electricity many years ago most municipalities introduced Inclined Block Tariffs (IBT) – basically a fancy term for ‘the more you use, the more you pay’.
Combine those with Time of Use (ToU) tariffs and you have a nightmare on your hands trying to manage electricity consumption in a busy household/business.
But, the thrust of this rant is how the NMBM has raped the ordinary consumer by adjusting the IBT tariffs DOWN from 5 blocks to 3.
In the past the highest IBT clocked in a 900 units per month.
Presently the highest IBT clocks in at 500 units per month.
In effect all those homes and businesses that never hit the highest IBT tariff were all of a sudden hitting the highest tariff possible.
It is said that he average electricity account holder consumes around 900 units per month so that is almost a guarantee that most consumers in NMBM are on the highest IBT – without changing habits, whilst trying to save like hell.
No wonder people are flocking to Solar and Renewable Energy as the market recognises that there are viable alternatives.
Related: Mogale City to Abolish Block Tariffs.
