DOCUMENTS

Cyril’s first 100 days = R100 more to fill up a tank of petrol – Mmusi Maimane

DA leader says indirect costs of unprecedented fuel hike will hit ordinary South Africans hardest

Cyril’s first 100 days = R100 more to fill up a tank of petrol

6 June 2018

Today we’re here at the Noord Taxi Rank in Johannesburg CBD to engage with both commuters and taxi drivers as to how we can mitigate the negative effects of last night’s astronomical fuel hike on the pockets of poor, working class, and middle class South Africans

At midnight last night, the price petrol hit a record high of R15.79 per litre – the highest it has been since the dawn of democracy in 1994.

The DA will therefore be writing to the Speaker of the National Assembly, Baleka Mbete, to request for a debate of national importance in Parliament about the tax and levy structure of fuel in the country. Because we simply cannot tax our way to prosperity.

Over the past 100 days, we’ve seen Cyril Ramaphosa’s ANC declare financial war on ordinary South Africans. Through increases in Value Added Tax (VAT), Income Tax, RAF levy, General Fuel Levy, and so-called “sin taxes” – the South African public has been strong-armed into paying for the sins of the ANC government. This is not the change we hoped for.

We are here to say enough is enough to this “tax attack” aimed at the backbone of our country – the poor, working and middle classes. These are everyday South Africans who are made to pay for the shortcomings and corruption of the ANC government.

When Cyril Ramaphosa was elected President of South Africa the price of petrol per litre was at R13.76. Today just over 100 days later, petrol costs R15.79 per litre which is a R2.03 per litre - or 14.75% increase. After just over 100 days of a Ramaphosa Presidency, it cost approximately R100 more to fill the tank of an average sized car. South Africans are angry – and rightly so.

This fuel increase will directly affect poor and working-class South Africans through increase in the cost of taxi fares. According to the South African National Taxi Council (SANTACO), during the last fuel increase of 67c/l in September last year, the increase per journey was up to R5 – depending on distance and region. There will no doubt be an even heftier increase this time around, affecting the more than 50% of South African households that are dependent on taxis for transport.

Even when using the conservative R5 estimate by SANTACO, for a person taking two taxi journeys a day, that’s an additional R300 per month just on taxi fare. This is crippling to the livelihoods of poor and working South Africans.

In addition to this, the indirect and often hidden costs of this unprecedented fuel hike will again hit ordinary South Africans the hardest. Due to the fact that most food in South Africa is transported via trucks, a fuel price increase inevitably leads to a food price increase.

According to a report published by the Department of Agriculture entitled The South African Food Cost Review, food accounts for 18% of household costs. For a family with a household income of R10 000, this fuel increase could result in a R270 increase in food bills. For the millions of families with less household income than that, or the millions with no formal income at all or who are living on grants, this fuel price is devastating.

The bottom line is that South Africans are spending more of their hard-earned money on food and transport under Cyril Ramaphosa’s ANC government. And this could be avoided.

Last year alone, the Road Accident Fund (RAF), which brings in 99.6% of its revenue from the fuel levy, made a loss of R30 billion – the biggest loss of any State-Owned Entity (SOE) for the financial year – running a deficit for five consecutive years. This is down to sheer mismanagement and tolerance of corruption. In truth, ordinary South Africans are now paying to plug this R30 billion black hole. President Ramaphosa must at once place the RAF under independent and external administration in order to eradicate corruption, install competent and independent leadership, and begin the process of tackling its R160 billion backlog in unpaid claims.

Despite all the enthusiasm and expectancy that greeted Cyril Ramaphosa when he was elected South African President, the economy cannot grow under the stranglehold of all of these tax increases. This is illustrated by yesterday’s Gross Domestic Product (GDP) growth figures for Q:1 2018 – which shows the economy shrunk by 2.2% - the highest quarter-on-quarter in almost a decade - taking us back to the pre-Zuma era.

We are left to ask where the so-called “New Dawn” is for ordinary South Africans. It appears to be just more taxes and less money at the end of the month. This shows quite clearly that talk shops, summits and PR stunts will not fix our economic mess and bring real and immediate change to South Africa.

South Africa requires real change, and real change lies outside of the ANC.

Issued by Mmusi MaimaneLeader of the Democratic Alliance, 6 June 2018