‘Even reduced tolls would raise cost of living’

2011-03-10 08:37

Even reduced toll fees would raise the cost of living in Gauteng, Investec said today.

“Indeed, there is a worrying trend in SA. It is one of a sharply escalating cost of living/doing businesses due to steep increases in administered (state controlled) prices,” economist Annabel Bishop said in a statement from the company.

She noted that the new growth path announced recently by President Jacob Zuma advocated that salaries and wages were either capped or only increased by the rate of inflation, with the exception of low income earners.

The cost of living was rising faster than the official inflation rate so this policy on salaries and wages would negatively impact real economic demand and reduce the impetus for job creation.

Companies passing on the higher cost of doing business would experience falling demand for their products and services, and this would reduce, not increase, job creating opportunities.

“Albeit a small example, the tolling of the ring roads around Gauteng nevertheless will serve more to undermine, than support, the aims of the New Growth Path,” Bishop said.

The Gauteng freeway improvement project includes the introduction of toll fees.

These tolls have been put on hold pending the outcome of a steering committee’s finding on more affordable toll fees. 

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