THE CATHOLIC INSTITUTE OF EDUCATION
Submission on
Local Government: Property Rates Bill
May 2003

Introduction

The CIE is an associate body of the Southern African Catholic Bishops' Conference and is mandated to play a co-ordinating and information- service role for Catholic schools in South Africa, Botswana and Swaziland. One of the institute’s core functions is the monitoring, analysis, negotiation and dissemination of information on education policy matters for the 372 Catholic schools in South Africa. Approximately 75 per cent of these are public schools on private property in terms of Section 14 of the South African Schools Act. These schools provide education for some 154 000 learners of whom 78 % are black. The schools are in deep rural areas, townships, inner- city and middleclass suburbs. These school properties are owned by the Church; either by the local bishop or religious congregations. The schools do not own the property. The CIE speaks on behalf of these Church owners of property in relation to properties which are used for schools and hostels.

2. Schools are part of the fabric of the economic and social development of a nation and Catholic schools have contributed to this by excellence in education and sound moral development of learners. The stated aim of Catholic schools is holistic education which contributes to the common good. Our schools are open to all in keeping with the religious precepts and the Constitution of South Africa. Many leaders in our nation have been educated in Church schools which have always believed in the ability of all the peoples of South Africa. Schools have no source of income other than fees and ad hoc fundraising and yet the Catholic church has found capital to build these schools for the common good all.

Points of concern

3. We align ourselves with the detailed submission of the South African Council of Churches but wish to reiterate some specific concerns which affect our schools.
The levying of rates on these school properties will place an unsustainable burden on the schools. Local authorities should consider identifying properties used for public benefit organisation activities. Schools which are registered with in terms of relevant Education legislation perform such public benefit activities and are able to apply for Public Benefit Organisation status exempting them from tax. We support the call by the SACC that ‘the list in section 8 (3) be expanded to include "properties used solely or principally for public benefit activities, as defined by Section 30(1) of the Income Tax Act,1962 (Act No.58 of 1962)"’.

Using market-based valuation methods is particularly problematic for schools. In some cases schools occupy land which is surrounded by both high value commercial and residential property while others are on agricultural land and receive little or no services.

A mechanism which ensures consistent application of municipal rates is necessary. Moreover an affordable appeals mechanism must be available to adjudicate cases where a dispute exists.


Conclusions

4. Education is provided for the public good and we propose that regardless of who owns the property, any property on which education by an institution registered in terms of relevant legislation should be exempt from municipal rates. We request that some mechanism be provided in the bill to exempt schools from property rates. This is in keeping with policy in several African countries. Namibia, Tanzania and latterly Zambia exempt schools and their hostels from property rates.

5. A second difficulty is that of monitoring rates on school properties as levied by the various municipalities all over South Africa. Lack of capacity in some schools to appeal against rates will mean an onerous burden for owners.

6. Catholic schools have traditionally operated on minimal budgets while providing quality values-based education. The levying of property rates tax will prove totally unsustainable for the majority of these schools and will necessitate their closure.

We trust that this submission will be treated favourably.