By Paul Collings, FleetWatch correspondent
South African consumers are being forced to shoulder the consequences of government’s fiscal shortfalls says the Road Freight Association (RFA), following the announcement of a 4% fuel levy hike set to take effect in June. The increase – 16 cents more per litre of petrol and 15 cents for diesel – will affect everything from transport costs to the price of basic goods.
“The RFA notes the decision by the Minister of Finance to increase the fuel levy by 4%,” states Gavin Kelly, CEO of the RFA. “This will be directly felt by consumers as transporters cannot absorb increases without detrimental effects on their bottom-line and business sustainability.”
Treasury, Kelly notes, is plugging a R4-billion hole in the national budget but doing so at the public’s expense. “This means that Treasury is ‘finding’ R4-billion towards the R75-billion shortfall from the previous iteration of the budget. However, this underscores that Treasury would rather tax citizens than cut the wasteful expenditure that has brought the country to where it is.”
Kelly expresses frustration at what he sees as a pattern of passing the buck. “Transport will become more expensive, consumers will pay more and the old adage that government can keep increasing taxes and levies to fund its uncontrolled spending remains true.”
Kelly emphasises that “Government does not have money – it belongs to the taxpayers and the time for accountability and responsibility has come.”
Pointing to the central role of the road freight sector in keeping the economy moving, Kelly adds: “Unfortunately, from June, the cost of logistics – 85% of which runs by road freight – will become more expensive. The consumer will pay more, transport through South Africa will become more expensive, global supply chains will re-evaluate their routes and you and I will dig deeper into our pockets for goods, services and transport costs.”
All of this, he argues, while “the government has ‘found’ a way to fund its salary and wage increases, as well as all the other vanity programmes it constantly runs.”
Kelly concludes bluntly: “This is not a good decision, neither in the medium nor long term.”
Editor’s comment: FleetWatch fully supports the RFA’s concerns here: the road freight sector – already under pressure from rising input costs, collapsing infrastructure and regulatory uncertainty – cannot continue to act as the national piggy bank, especially when it is playing such a crucial role in the economy in the absence of an efficient railway system. When government reaches for the fuel levy to patch over budget holes, it’s not just squeezing transporters – it’s inflating the cost of living for every South African. It’s time Treasury stopped fuelling its shortfalls on the backs of those keeping the wheels of the economy turning and turns towards arresting the billions of Rand of wasteful or irregular expenditure so often highlighted by the Auditor-General.
As an example of the savings that could be made in this area, in a presentation to parliament’s chairpersons of portfolio committees, in which the auditor general, Tsakani Maluleke, highlighted outcomes for government departments and state entities for the 2023-24 financial year, she reported that that in the past five years, the government lost more than R14.3-billion through payment of goods that were not received, and the ineffective use of resources. So there’s the real money.
Ends
