Chris Moerdyk

How long can government bleed the population?

2012-02-27 10:00

Chris Moerdyk

If South African society was a rubber band, I reckon that it is being stretched to the point where it is can't really stretch anymore and could well come snapping back with a vengeance.

Yes, I heard all about social spending increasing, massive infrastructure investment, and tax breaks for lower income earners, but I am still extremely worried about just how much tolerance the majority of South Africans have in reserve. Especially those who are battling to make ends meet financially. The people Trevor Manuel was talking about, who had already spent next year's salaries.

You see, in spite of all the assurances government has given with regard to helping the poor, those increased hidden taxes we are now having to pay will pretty much wipe out any savings we get from income tax breaks.

For example, last week's budget saw a whole lot more taxation being added to the petrol price and the inevitable result of that will be an increase in just about every consumer product you can imagine including basic staples.

In a radio interview a few days ago, I listened in awe as a distraught caller explained how more and more poor people were having to resort to borrowing money from loan sharks just to buy food. Just to stay alive. And then having to pay back the loans at horrific interest rates. That's the real world. A world, I'm convinced cabinet ministers never see.

I have to wonder if government actually knows whist is going on at grassroots level. How some people actually can't pay any more.

What worries me even more is the manner in which government is imposing taxes these days. Just take that Gauteng e-tolling for example. In spite of this being opposed by everyone from organised business, Cosatu and just about every representative body you can name, Government has just dismissively said, "get used to it. e-tolling will happen".

We were then told very arrogantly that South Africans should not even consider avoiding paying the tolls because they will be hunted down and prosecuted.

The assumption is that these roads are only used by the rich who can afford the extra tolls.  Indeed they can, but do not think for a minute that businessmen and the owners of delivery trucks and so forth will not simply pass on this extra cost to the consumer. Of course they will, and hey presto. up goes the price of those basic essentials again. It’s exactly the same with those exorbitant airport taxes.

Now, without going into to any complex finance-speak, there is a limit to which it is generally accepted that society can be pushed in terms of paying tax. This latest budget has pushed South Africa a few percentage points over that limit for the first time in history.

I am absolutely aghast that government seems to be unconcerned  about the implications of  the effect of all these hidden taxes that lurk in things like petrol prices, import dirties, e-tolls and literally hundreds of others that effectively mean that South Africans are paying a walloping amount of tax on each Rand they earn. And then paying more for essentials as the private sector recoups.

With the oil price escalating due to on-going conflict in the Middle East, the petrol price is already heading deeper into record territory. It will go higher and while Government might argue that our petrol price is lower than that in Europe and the USA for example, they don’t ever mention that our earning power is a heck of a lot lower. Much, much lower.

I am alarmed at the arrogance and flippancy that is being used by government these days to increase tax on strategic essentials such as fuel and also just telling the whole of South Africa to go and get stiffed and get used to it.

Frankly, I don’t think government realises the groundswell of resistance that is building against them in terms of price increases and resistance to issues such as e-tolling. Particularly in view of all the mismanagement and corruption in municipalities and so many of the provinces.  

- Follow Chris on Twitter.

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