Opinionista Refiloe Nt'Sekhe 2 August 2018

The rise in the cost of living in SA cannot continue

The truth is government could do a number of practical things to decrease the petrol price.

Protests are never fruitless, they are a vehicle for the citizens to voice their concerns at the current state of affairs. And those affairs are dire. The cost of living in South Africa has sky-rocketed. A combination of VAT hikes, sugar tariffs and petrol price increases have decimated the ordinary citizens pocket.  SA household savings came in last out of a G20 country survey compiled by a Fintech firm in South Africa, indicating that South Africans are eating into their capital or living in debt.

The ANC are taxing the poor to make up for their mismanagement of the economy and fill the hole created by state capture, SARS capture and corruption. It is in this context that the DA’s march with the Organisation Undoing Tax Abuse(OUTA) should be understood.

Citizens are unable to afford the cost of living in South Africa and urgent intervention from the government is required. This is the motivation behind the DA’s call to reduce petrol levies.

Currently the Road Accident Fund (RAF) levy which forms part of the fuel price is R1.93 for every litre. This levy is then transferred to the malfunctioning and financially incompetent RAF. The RAF is currently sitting on R188-billion in backlogged claims and made a loss of R34.7-billion thanks to the bungling of the ANC. This entity needs a complete overhaul and we would place the RAF under independent and external administration to eradicate corruption. Another option would be looking at third party insurance being a prerequisite for any claimant, thus reducing the burden on the fund.

On State Capture under the ANC rule, over a R100-billion has been estimated to have been looted from South Africa. With the recovery of this amount along with the prosecution of individuals and tightening of procurement procedures for all SoEs, much needed space for the restructuring of the petrol price will be created as the revenue leaks are closed and reversed.

The privatisation (part or full) of several SoEs including SAA and Eskom would free up much needed pressure on the fiscus in terms of state guarantees and capital injections.

Other steps to generate revenue would be to reduce the size of a swollen ANC government. The current size of the Cabinet is bloated along with the perks that accompany ministers. The Ministerial handbook needs to be amended to cut back on protection costs, travel for partners, housing and vehicle benefits for ministers.

The ANC government’s wage bill is bloated and needs to be curtailed through stringent requirements for bonuses and increases. The government could look at selling non-core assets in the short-term to also provide breathing room whilst government expenditure is reined in.

The SARS inquiry which is looking at the capture of this vital entity by Tom Moyane and Co under the ANC watch, will also assist in the process. The inquiry heard from experts how State Capture cost SARS at least R142-billion in uncollected tax, or the tax that was manipulated into looking like revenue income. Swift action in removing corrupted individuals, appointing and re-appointing competent staff, re-opening the large business centre and tackling illicit flows will generate more revenue.

All these measures will be able to bring about short and medium-term wins, increasing our revenue side and cutting back on expenditures. This will allow the government to reduce the levies on fuel.

In the long-term, a smoothing out mechanism needs to be developed to reduce the erratic and volatile nature of the petrol price. This would soften the impact of the rand/dollar exchange rate and oil price hikes.

The truth is government could do a number of practical things to decrease the petrol price. For example, the country could save R13.8-billion if we cut the bloated Cabinet and a further R3.9-billion by reducing foreign missions. The RAF also disgracefully spends half a million rand every month renting 300 office chairs, something that can be stopped immediately!

We as the DA are taking a stand, a tough stand, to say that this rise in the cost of living cannot continue and change is needed. It is for this reason that the DA has called for an urgent debate of national importance in Parliament on the RAF and fuel levies.

Where there is a will, there is way, the revenue can be created if the ANC government decides that citizens should come first not last. DM


In other news...

The South African economy is choking harder than the Proteas. Although to be choking you have to actually be eating and the Proteas seem to be on some sort of juice cleanse-like fast…*

Back to the economy: In the first quarter the GDP dive-bombed by a whopping 3.2%. The sense of futility can paralyse us into inaction and moaning. But it’s times like these that call for effort and action, no matter how small. Yes, South Africa is hurting. Yes the ravaged economy is evident everywhere you look. But you can make a difference, in your own personal way and by supporting independent media like Daily Maverick. We’ve pledged to continue the fight through producing incisive and impactful investigations and analysis, the same way we have done every day for the last decade.

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*Proteas, you know we love you. We’d just love you more if you won occasionally...

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