The logical alternatives to e-tolling

2012-04-29 12:04

Late on Wednesday afternoon after posting last week’s article, I received a telephone call from a member of the Opposition to Urban Tolling Alliance.  He explained their reasons for believing e-tolling is not a workable solution and why it would cause untold misery to many of the people using the Gauteng road network.

On Saturday after the interdict was granted, he SMSed me on the victory and I rang him to have a further conversation.  In particular, I wanted to explore alternatives to raise the necessary revenue to do the two things which are essential: firstly to repay the loans that were raised to finance the improvements and to service the interest on them. This is the “elephant in the room” since the compounding effect of interest makes the figure, which currently stands at R20 billion, worse by the day.  Further delays in implementing revenue-raising measures just worsen the problem.

Secondly it is critical to raise enough money to keep the roads in good condition.  The last thing one wants to happen is for them to deteriorate through lack of funds.  Undoubtedly, the widening of the roads and the redesigning of the intersections have raised the productivity of the Gauteng economy through less congestion.  These improvements must not be sacrificed by bickering over who is going to pay.

Logically, I can think of four alternatives to e-tolling.  The first I am sure would be supported by the majority of News 24 readers, judging by the depth of feeling exhibited in the comments made to my column last week.  Government – both national and local - simply has to clean up its act.  It has to reduce wasteful expenditure and use some of the money saved to service the loans (which it has guaranteed) and to maintain the roads. People feel they are being taxed to death and that they should not be asked to pay extra taxes or levies for infrastructure which should have been financed by their current taxes and levies. Enough is enough and events of the last week have shown how strong civil society and people power can be.

The second option is to raise the additional revenue required through increasing income tax, company tax or VAT.  This completely goes against the “user pays” principle; but it would spread the burden around the country as a whole and lower the impact on individual citizens, who are already financially stretched. The argument would of course be put forward that it is unfair for other provinces to foot Gauteng’s bill. The riposte to that would be that Gauteng for years has, through the tax and levy system, subsidised the other provinces. Now it is payback time.

The third option is for a general increase in the fuel levy which, although slightly bowing to the “user pays” principle, would still attract the kind of criticisms which apply to the second option. Around the world, petrol prices are rising and taking a bigger bite out of people’s disposable income, which is already stagnating or falling as a result of economic hard times. This top-up measure would aggravate the hardship.

The last option is to have a ring-fenced increase in the fuel levy that only applies in Gauteng. The difficulty with this option is that the country would have a split fuel price which could cause a sense of injustice for Gautengers and probably promote some interesting trading opportunities just outside the borders of Gauteng.

None of these options is easy and maybe a combination is best. The worst outcome would be for everything to be put on hold indefinitely as the loan ticks up and the roads suffer.
 
 
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