Mr Ramaphosa, cut the R5.30 tax on petrol now

1 October 2018

Today’s announcement of yet another petrol increase of 99c per litre – the seventh increase in just 10 months – is a vote of no confidence in Cyril Ramaphosa’s ANC and its ability to revive our economy, cut the burden on ordinary south Africans, and create access to jobs for those without work.

South Africa’s economy is in meltdown, as we’ve entered a formal recession for the first time in a decade. Unemployment is a record high, and the buying power of the rand is steadily eroding. The cost of living has gone up. VAT has gone up. Income tax has gone up. “Sin taxes” have gone up. Electricity has gone up. Food has gone up. South Africans are getting poorer, and the government’s answer to this is to increase the cost of living for all South Africans.

The ANC cannot continue to blame these fuel price increases on “international markets”. The reality is, roughly one third – or R5.30 – of the cost of petrol per litre goes directly to government via two General Fuel Levy and the Road Accident Fund Levy.

This tax has increased far more than anything else in recent years. Over the past ten years the General Fuel Levy has almost doubled, and the RAF levy has more than tripled.

Our government is making the people of this country pay for its corruption and mismanagement of the economy and public fuds. Neighbouring countries fuel levy is miniscule compared to ours. Botswana for instance adds around 40c per litre. That’s why petrol in Botswana, Namibia, Swaziland and Lesotho costs between R10 and R13 per litre while we will be paying over R17.

The solution is simple. We must review the burdensome levies on fuel with the aim of reducing them by at least R1 in the short term. This will ease the burden on South Africans. It is possible to fund any shortfall created by this cut through sensible fiscal reform. By trimming the bloated cabinet and reforming SOEs, and by making a serious effort to curb government corruption, a cut to the fuel levy is possible.

Ultimately, the lives of all South Africans will only get better when we kickstart our economy and get it growing. To do so, the DA would immediately do the following:

1. Scrap reckless economic policies like the proposed nationalisation of the Reserve Bank and the undermining of property rights through expropriation without compensation.

2. Announce the privatisation, or part privatisation of SAA, and the split of Eskom into separate power production and distribution businesses.

3. End Eskom’s monopoly and allow cities to purchase directly from independent power producers, increasing competition and lowering costs.

4. Introduce a fiscal austerity package to contain current spending and stabilise national debt at 50% of GDP. Commit to funding any further revenue shortfalls by cutting wasteful expenditure, not through new taxes.

5. Cut the size of the Cabinet to around 15 ministries.

6. Exempt small businesses employing fewer than 250 employees from complying with restrictive labour legislation, other than the basic conditions of employment.

7. Immediately pay all outstanding invoices owed to small businesses from National and Provincial Governments, amounting to a fiscal stimulus for small businesses of R 20.7 billion and R 7.1 billion respectively.

The DA has a petition against these burdensome taxes, which can be accessed here, and we encourage all South Africans to sign it.

The ANC cannot continue to pick the pockets of South Africans to mitigate against their inability to manage the economy. It is time for the change that creates One South Africa For All.

Issued by Solly Malatsi, Team One SA National Spokesperson, 1 October 2018