Cautionary call on debt write-offs

Writing off residents' debt in the City of Tshwane is not a good plan as it may promote a culture of nonpayment, according to economist Dawie Roodt.

- Marizka Coetzer

This week, the Tshwane council passed a report to write off debt to residents who had applied to the city's affordability committee.

"The moment you start writing off debt, you open the door wide. Two things happen when you start to forgive debt.

"Some will continue not paying their bills once the debt is removed and it also may encourage others to stop paying their bills," he said.

Roodt said the city should lead by example and collect debt from big accounts, such as state departments.

"They are playing with fire.

"If you go down this spiral it's hard to get out of it," he said.