Boon or bane for property owners?

PRETORIA: Government was quick to quash a flurry of panicky media reports when the emotive issue of moving Parliament from Cape Town to Pretoria was raised again recently. This time however the issue may not be so easily laid to rest as pressure grows on government to drastically cut spending.  Some speculate that moving parliament out of the Mother City will have a detrimental effect on the economy and property values, others believe it may actually be a boon.  

When government changed hands in 1994 it sparked the first round of debates about the seat of parliament and there was a strong lobby to move parliament to Pretoria. At that stage government officials were dividing their time between the two cities, by spending six months in Cape Town and six months in Pretoria. Currently however government is paying for this intercity migration on a weekly basis, at an astronomical cost to the state. Members of Parliament (MPs) also have to maintain residences in both cities, amplifying this cost.

What makes the argument for the move more compelling this time around is the global recession and calls for budget cuts across the board. Municipal budgets have been slashed by millions and despite the urgent need for infrastructure upgrades, local councils have been told to deal with the budget cuts as they are unavoidable. It will be difficult to justify the costly commute to residents who will have to deal with potential service shortages and failing infrastructure.

Cape Town Partnership Chief Executive Andrew Boraine doesn't believe that moving parliament will be more cost effective.  "The cost of constructing a new parliament, at a time when the government is running a major fiscal deficit is prohibitive," he adds, "it's not just the cost of constructing a new parliamentary complex, it's also the cost of constructing a new parliamentary village and remember, MPs come from all over the country, they have to fly in from somewhere."

The Cape Town Partnership is a public-private urban renewal company tasked with the regeneration of the city's CDB. According to Boraine there may be a number of benefits to Parliament leaving the city. Firstly it would open up areas around the parliamentary complex which have been closed off to the public for security reasons. To cover the cost of such a move government would probably have to sell prime property in the city, releasing that property to the commercial sector.

Boraine also doesn't believe the move would have a detrimental effect on the economy.  Cape Town's economic life blood comes from tourism and creative industries such as media, film and design. Although there is a certain amount of status coupled with being the seat of parliament, the city has a comfortable fallback as one of the country's most popular ‘lifestyle' destinations.

Boraine is betting that the move will not happen and reckons it would be detrimental for other reasons, like upsetting the balance of power. "That is why Parliament is in Cape Town, the judiciary is in Bloemfontein and the executive is in Pretoria in the first place. Do you want to centralise all political power in one region?"

Government has set up a task team to look into all cost cutting measures. One of the matters the task team will investigate is the cost of operating government from two different locations. But thus far no one has been prepared to speculate on what the outcome of the task team investigation might be. Shortly after the matter arose, government spokesperson Themba Maseko told a media briefing that, "Parliament is and remains in Cape Town. So there's no decision to move Parliament to Pretoria." Write to: news@realestateweb.co.za.

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