According to Sanral, they had done an impact assessment study on the Gauteng e-Toll roads. They were done by University of Cape Town and the University of Johannesburg. I have to wonder were they got there facts and on what socio economic group they did their study on.
The middle class as a grouping in the largest employee in South Africa. They directly employ people at the lowest end of the market and indirectly keep people in jobs through their spending power. For the purpose of this study we will look at the middle class and the impact the Gauteng e-Toll system will have on this grouping of people and the knock on effect this will have. The e-Toll avalanche of disaster.
South African society is made up of four distinct groupings of people. The “No to low income grouping”, the lower income household, the middle class and the rich to super rich. The “No to Lows” is the labourers, informal and part time workers. 0-R3000.00 per month. The lower income grouping are the support and admin staff in companies, hotels, shop assistants and employees in entrepreneurial and micro industry, R3000.00 – R10 000.00 per month. The majority of these people will not directly pay for tolls as they would use taxis and other means of transport. Indirectly these are the people that will end up paying the most.
Let’s assume that the average family is two adults and two children, they live in an average middle class suburb with a bond or even renting. Lets assume the Husband earns R35000.00 gross per month, the wife earns R20000.00 per month, this will net them approximately R35700 per month One would think that this is a lot of money and the majority of people in South Africa could not even imagine this amount per month. It is more than the annual income of the majority of people.
Let’s first look at the spending power of the average middle class family. Bond or rent, R8000.00, School fees, R4000.00, Electricity and rates, R3000.00 per month and going up. Food per month R5000.00 and going up, Housekeeper, R2500.00, DSTV, R600.00, Telephones and communications, R1000.00, Petrol, R3000.00 and going up. Other accounts, Edgar’s, hire purchases etc, R2000.00, Car repayments and insurance, R4600.00 per month. Now if you have been calculating it works out at R36500.00. At this point we have not included incidentals, credit card repayments, holidays, going out for dinner. Now we know that debt is going up and we can see why.
Now we add R550 per month for E-Tolling and add an extra R125 for electricity we can see that the above average middle class family is going to have to trim on their cost of living expenses. So, what do we cut? The only things one can cut are, use the telephone a bit less, the housekeeper and eventually as time goes accounts and car repayments. Cars and accounts take time, but the dilemma is that one has to cut instantly otherwise the sheriff is coming. There is only 1 option, the staff.
A reasonable figure would be 100 000 people would be affected. What percentage of these people are going to cut their household budget, 100%, 50%, 20% ? Sanral has said that they will create 1200 permanent jobs, but what jobs are going to be lost?
One hundred thousand people are going to have to trim the fat by R500 per month. That will be R50 million per month that will be shifted away from homes and businesses. Let’s say that 2000 small businesses will be affected. It works out at a loss of R25000.00 per month per business. That affects 3 – 10 employees. We will be generous to Sanral and say it affects 3 staff members per business. That is 6000 job losses.
If we look at the middle class and their only options, the percentage of jobs losses are even greater. Out of the hundred thousand effected people let’s assume only twenty percent have a housekeeper and decide to retrench. That is 20 000 jobs lost and it equates to R50 000 000.00 rand per month lost to “No to Low” group. Out of those twenty thousand job losses it would effect 100 000 people in the extended families.
No matter how we shift and fiddle numbers the job losses will be greater than the number of employees Sanral will employ. This whole process smacks of some people getting rich at the expense of others. At the end of the day 100 000 middle class persons and 100 000 of the lowest income earners will be negatively effected.