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.  

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  • Vicky - 2012-02-27 10:27

    Maybe they will get the message when they get voted out - ahh - is that the sound of a porcine sqaudron revving their propellors?

      str4f3 - 2012-02-27 12:30

      Voting them out? The majority of thier support, cannot read news, does not understand why thier taxi fare's go up, but will continue voting for the ANC. if you think they are accountable for thier actions, you're wrong. It is more of a religion than a political party, you even get to go to thier heaven when you vote for them :P

      Sean - 2012-02-27 15:54

      The ANC will not get voted out. First they will blame apartheid and the blacks will hate the whites more. Then when the blacks eventually turn on the ANC the ANC will make good on some of the struggle promises. They will give the blacks the white farmland. Then they will start taking everything else. Eventually, they will rig the elections. This is the exact patern followed in Zimbabwe over the last 30 years.

  • Dean - 2012-02-27 10:43

    Voting them out would be a win for everyone. We need business people running the country, not politicians.

      SJ - 2012-02-27 11:22

      Be carefull what you wish for.

      Vaal-Donkie - 2012-02-27 11:28

      Nope. America is run by businesspeople. What we need is a government where no-one has ultimate power. Or rather, a government that leaves us alone to get on with our lives.

      Donald - 2012-02-27 11:49

      They dont get voted out in Africa, have you not noticed, the rule is 'one man, one vote, one time' then the party that is voted in stays voted in until there is some sort of coup.... Black Africans always vote for a ruling party, even if they do not support them, a very odd concept to the white African.

      Greg - 2012-02-27 14:48

      Business People?????? LMFAO!!!!! that has got to be the funniest thing i have heard all day.. Dean, YOU are a noob :P

      Greg - 2012-02-27 15:02

      Wait, you deserve an explanation.... The ANC and every single western government is a corporation. South Africa IS a Business and what is a business's no.1 goal? Profit!! WE the PEOPLE are the products of this business in the form of TAX on EVERYTHING we make. Politicians ARE business people. They do nothing for the well being of humanity, EVERYTHING they do is in the name of PROFIT!! So... Please educate yourself before saying politicians need to be business people unless you are happy with the rich getting richer, and the poor getting poorer. (The poor finance the rich!)

      Vaal-Donkie - 2012-02-27 15:07

      The SA government is a monopoly.

      curbylee1 - 2012-02-28 17:49

      We Need a woman to run this country.....

  • justin.pretorius - 2012-02-27 10:50

    The country will collapse before a new regime is voted in. That is how it is done

  • Dean - 2012-02-27 10:51

    Its not that they dont realise how much taxes are being ripped from our hands... its just because their focus is elsewhere. IE : The money inevitably trickles down to the government... and ultimately this is where the problem of GREED blurs the vision between justice and reality. GREED is what this is all about. Its not actually about getting something for your money. The highways were fine before. We didnt ask for the upgrades, so why should be pay for it? The last time i went to a restaurant and a waiter brought me something i didnt ask for... i didnt pay for it. Why - because i didnt ask for it. Government chose this e-tolling thing without our consent, and thus they should foot the bill. But now we are being forced to pay for this nonsense we didnt ask for. Besides, Fuel is already taxed. So why are we being taxed again? We are paying TWICE for using the roads.

      Sharon - 2012-02-27 11:29

      I watched Blade Nzimande this morning on e-news - he said "Let the rich people pay the tolls" - amazing. Does he realise that the majority of people using the highways are in fact middle class people who are stretched to the limit? I cringe every time I go grocery shopping, sometimes items go up by as much as 10% from one week to the next. Heaven only knows what these toll fees and increase in the fuel levy are going to do to the prices of food!

      Vaal-Donkie - 2012-02-27 11:41

      "Rich" means everyone earning more than R100k a year. But don't take my word for it, go look it up.

      Thando - 2012-02-27 14:57

      That Blade isn't the sharpest tool in the shed. Isnt he one of the rich now after getting a nice minister position ?

  • naomi.oosthuizen - 2012-02-27 11:05

    I agree with this article. The 4% I'm saving on tax from end March, is going for tolls and increased fuel levies. So I am actually paying more. :-( AND, of course, lets not forget the 11 million people that actually work - ONLY 6 million actually pay tax. HOW much longer can Government keep on bleeding us dry? We are welfare state. People are getting paid to have AIDS, to have children. STOP the payouts. Stop rewarding people for being lazy.

  • Vaal-Donkie - 2012-02-27 11:07

    Government is operating under the mistaken assumption that a socialistic framework can produce wealth. If income tax was halved, we would in a few short years see a miraculous boom in the private sector. The simple reason being that we'll have more money to spend on stuff that needs to be manufactured.

      MrShuffles - 2012-02-27 17:01

      I would start trying to save if I were you. It will only be a few short years before we emulate |Greece and Spain - and we will not have the EU to bail us out - oh well, failed state is the state of Africa...

      Elaine - 2012-02-29 08:38

      I read yesterday about an investment tax of 15%. Now I have a small amount of money invested in unit trusts. I probably make R1000 per year on that, will 15% of that disappear? It certainly doesn't make one want to save. You get so little from the banks anyway. I'm thinking, swiss francs in a sock under the mattress may be the way to go! :)

  • Tim - 2012-02-27 11:08

    I doubt the middle class will be able to vote the ANC out. The ANC's support base comes from lower income groups...hence all the tax concessions the ANC is making towards them for retaining them in power.

  • Vaal-Donkie - 2012-02-27 11:14

    To demonstrate the ridiculousness of the petrol levies and e-tolling: My monthly instalment on my car used to be R1800 (I've since paid it off). I use about 200 litres of Petrol a month to travel to work and back. The government takes about R3.60/litre in levies. That's R720. The e-tolling system has a proposed upper limit of R500 a month (which is very easy to hit for someone like me). That means that the Government takes R1220 from me each month for driving my car. Coupled with the R11000 VAT they took when I bought my car for R80000 One sees that our government can, by the time I've finished paying off my 5 year instalment sale, make more money off my my car than GM who sold it to me. What makes it even worse is that GM probably only makes R10k profit on the sale of each Corsa Lite, but the government pockeets the whole R80k.

      bdanney - 2012-02-27 13:04

      It's even worse than that. Your cars import duties are 25% of the total price. You also mention you give the Gov R1220 just to get to work each month and then how much tax do they take from you for working?

      Vaal-Donkie - 2012-02-27 13:17

      Good point about import duties.

      deon.fourie - 2012-02-27 14:35

      Yeah, and don't forget "carbon tax" on new vehicles, which has sweet bugger all to do with using money to promote environmental health.

  • SJ - 2012-02-27 11:22

    They will keep the bloodletting up until there is none left and civil war breaks out.

  • deon.fourie - 2012-02-27 11:31

    Well, I for one have reached the outer limit of what my salary can take. And to add insult to potentially expensive injury I'm not even capable of paying for medical insurance at the moment, let alone saving each month. This, after 4 years of studying and 6 years working a professional career, and limiting my expenses as much a I can. I can't even blame my employer anymore since I am actually earning the median of what I'm worth in this country. There simply isn't anything else I can do now to save costs. The gloves are off, I will not be paying e-tolls, I will not even be paying potential traffic fines, SABC or any of the imposed taxes and government expenses I still have control over. My mental uprising has already started months ago. I can only hope I'm not alone and that soon there will be a outlet where the middle class can start flexing their muscles a bit.

  • Barry - 2012-02-27 11:31

    The goverment can spout and threaten all they like about South Africans not paying tolls. This is one of the best examples where the public can hit the goverment where it hurts. Do not buy e-tag, the system cannot be implemented without it. The government rant it will hunt down offenders...crap... can't even send out municipal electric and water accounts. It is time that the public demonstrate to goverment that we are sick and tired of stupidity corruption aand inability to lead. The auditor general declares 25 Billion of taxpayers money cannot be accounted for. This is the type of bulls!tt we are supposed to sit back and take. Time for the government to take a very sharp lesson and have the e-tag system rejected by the public. Bullying tactics show that there is major concern already that the e-tag system cannot be implemented due to lack of e-tags sold. They will attempt to load more tax elsewhere but it will be a small victory for the taxpayer.

      deon.fourie - 2012-02-27 12:58

      The problem is that simple dissent won't cut it either. They have the power to hit us where it hurts, and once they keep raising taxes on fuel this "screw em, I'm just not paying" thing won't work. We need to scare them. Simple as that.

      flysouth - 2012-02-27 13:28

      Barry, you are correct. The entire business model relies totally on fast, cheap and simple collections via debits against a bank account. Without the ability to do this, provided solely by buying an e-tag and signing a document authorising access to his bank account (sheer madness in any circumstance!) the system cannot function. Thus a boycott of E-tags is the first step (and probably the only step required) in collapsing the system entirely. When you have set up a business where cost of collections is estimated at say, 2% of turnover, and then you find that cost of collections ends up at 30% of turnover, what happens? - the business must fail! Some figures everyone must understand. The concessionaires of the system of open-road tolling are an Austrian company called Kapsch - the local operators are SANRAL and their sub-contractors. SANRAL have stated that Gauteng revenues to SANRAL will be about R300 million per month - this represents the 15% of turnover which SANRAL gets - not the full amount collected! The rest goes to Austria. How do we like this so far? Let us all help this iniquitous and ruinous scheme fail and let us also ensure that no motorist cooperates in his/her own financial demise by buying an e-tag. One might even, hypothetically speaking of course, take a leaf from the ANC songbook of revolution by intimidation and coercion - by say, puncturing the tyres of any vehicle you may come across bearing an e-tag! Just thinking out loud...!

  • Victor - 2012-02-27 12:14

    Maybe they will get the message when we become like Egypt or Syria or Greece !!!!!!!

      Vaal-Donkie - 2012-02-27 12:39

      Oh please! That is exactly what they want. The ANC is so obviously Marxist it's not even funny. Do yourself a favour and download and read the Communist Manifesto. For bonus points, tick off all the parallels between what's written in there and the stuff you hear coming out of the mouths of the "comrades" in SA. They will not stop until there is no middle class left. It is their only goal.

      Vaal-Donkie - 2012-02-27 13:21

      Here's the whole thing straight from the horse's mouth:

  • dominique.dhotman - 2012-02-27 13:14

    This is a flippin sad state of affairs :(

  • flysouth - 2012-02-27 13:16

    Why would the thieving ANC care? Their voters do not pay tax and the 5 million who do pay tax would largely not vote ANC anyway!Thus the ANC takes little risk by emptying the pockets of what they perceive as the 'wealthy'. Just an aside - in Cambodia under Pol Pot millions who were perceived as 'wealthy' or 'intellectuals' were murdered by the rest, with the blessing of the regime - one such victim is recorded as having been a 'wealthy plutocrat" for the reason that he was the owner of a couch and a matching chair! We in SA are getting there believe me, under the dire ANC ideology! When government turns around and tells us what a massive favour they are doing us all by capping tolls at R550 per month, then you know that they have no comprehension of what R550 means for millions of families in SA, when ripped out of the monthly budget. That is why we must fight to the end these tolls - and ultimately if we wish to stop the arrogant imposition of more and more unacceptable rip-offs in future (for they will never change their ways) by the ANC, we must replace the ANC entirely as government. This is what we have a vote for - let's all make sure we use it!

  • ludlowdj - 2012-02-27 13:25

    Of course government does not care, as long as there is a taxpayer with money they will do what ever is necessary to part him from what he has. South Africa is also in for a very nasty food price shock in the coming months. As a net importer of food we will shortly be hit by major food shortages as a result of the worldwide weather and flooding, 173 000 hectares of crops lost in Indonesia alone, no add as the other staple farmers and we are looking at a situation where no matter how rich you are you will not be able to buy certain food, unless you do so on the black market.

  • Ronald - 2012-02-27 13:42

    We are slowly nearing the point where it is cheaper to stay home and beg for handouts or government grants than leaving the front door to go to work. Take the example of a person that owns a small company with a profit of R1 Million per year. This amount is taxes at 28% leaving R 720 000. If the owner should take the whole amount, he will be taxed at 40%, leaving R432 000. Subtract 14 Sales tax, and he is left with R 371 520, that is 37 % of what he has earned. Not much incentive to start your own business, is it? I would rather work in or for government and keep all I steal, even if I do get caught.

  • Clive.D.Buckley - 2012-02-27 15:01

    Is anyone actually considering paying the e-toll??? I am astounded by the comments... I for one will not pay a cent. I will fight any fines I get tooth and nail in court... But I am curious, who here is going to buy an e-tag?????

      Barry - 2012-02-27 15:28

      Only a complete fool would even consider giving SANRAL banking details. The corruption at goverment level prohibits this. Your details would not be private. The e-tag conditions do not meet the consumer protection act. There is no recourse in the event of incorrect billing. Fake registration plates are rife and will increase. Everything on the market will increase in cost as the highway is JHB lifeline. I thinks the worst case in this list is the fact that 14% VAT is charged. You cannot insult anyones intellegence more than that. Tax on a tax. The government thought up this scam and wasted massive amounts of money on lavish facilities. Independent authorities should take the clowns to court and impound assets. South Africa has the most expensive highway advertising hoardings because that's all they are fit for.

      deon.fourie - 2012-02-27 15:39

      Exactly. Not to mention I get p1ssed off at people saying they're going to "boycott" the toll roads? How is that helping exactly? I say use the roads more from now on and just don't pay!! Screw them. End. Of. Story.

      Clive.D.Buckley - 2012-02-27 15:59

      other option IS to boycott the roads completely... When there is NO traffic on the highways, and all the back roads are congested for hours, and the entire guateng is hourse late for work every day, causing a massive impact on the economy (not to mention the strain this will have on the condition of the back roads), maybe government will back down... I get the feeling though, that they are acting like a petulant child... Think they had this grand idea, and now the populace don't wanna play nicely with them...

  • Ipeleng - 2012-02-27 15:33

    You can't strengthen the weak by weakening the strong. In other words, social spending cannot dominate the budget of a developing country. Taxing a nation to death is not the way to do it. What we need is more small businesses, especially in manufacturing. But from my experience (being a small business owner from 2004), anything you want to achieve with your business using government funds, will cost you more in the long run, because the civil servants reviewing your case want them and half their family on your board or have shareholding should they fund you. We wrote a business plan that could've provided thousands of sustainable jobs (read the English sustainable as in on-going, not the government version - full-time temporary) - but our reluctance to "take on silent members" ultimately led us to shelving it. These are the people tasked with trying to grow the country and I have NO faith in them any more. Where can I put in my Vote of No Confidence in the government, it's time they know!!!!

      Barry - 2012-02-27 15:52

      Ipeleng, your vote of no confidence should be in the next election.

      Ipeleng - 2012-02-28 08:26

      @Barry, I have never and will never vote for them. At the rate they're going these days, I wonder if we'll even have elections any more!

  • Dennis - 2012-02-27 15:39

    Its all about theft which is driven by greed. Sariaries of Government officials should decrease by two thirds and they would still be creaming it. This is the only way to stop the rot and get the country off the ground. This cadre deployment has created a florist of half-wits purporting to run the country, provinces and minicipalities. The ANC represents the largest corporate intellectual deficit in Africa. Its sad and ironic that an orgainization led by heros like Mandela and others could degenerate into a racist, oppressive and self-serving regime, which robs the country blind for self enrichment. So much for the fight against apartheid. Three cheers for those who plan to defy toll fees designed to enrich local polititions and off shore companies. Pavin Gordan, you may be a clever accountant but you have sold your soul to your puppet masters !! Dennis Theron

  • TheyTookMyNickLaZynEko - 2012-02-27 15:40

    fully agree author!!!!!

  • MrShuffles - 2012-02-27 16:56

    More years ago than I prefer to remember the French Government imposed one toll road too many. The truck drivers said Enough Already! and they "broke down" with their vehicles on all the on ramps leading to the freeway system concerned. Within hours the roads around were so blocked the Police could only get in to the front by helicopter, to find greasy handed truck drivers beaming at them! I believe Paris was almost shut down - the entire population supported this quiet revolt and the toll road was canned. Now wasn't that a clever idea!

  • MrShuffles - 2012-02-27 17:06

    I believe one of the most scariest things any government person can see is the sight of thousands and thousands of white South Africans toyi toying and blockading streets together with black South Africans in protest at their arrogance and non delivery. Protest appears the ONLY thing which gets Government off its ass and doing something.

      deon.fourie - 2012-02-27 22:13

      If anyone asked me what I want the most right now... this would be it. A man can dream...

  • Cathy - 2012-02-27 17:39

    My sympathy is also with the aged. Many retired a while ago with pensions that seemed more than adequate at the time. Inflation, utility price hikes, property taxes and the high cost of medical aid are making it impossible to survive. Their homes are fully paid off, but they can no longer afford to live in them. They had to drop their medical insurance because of exorbitant price hikes and had to join the thousands that queue up daily at state hospitals for medication. They don't qualify for government assistance because of their ever meagre personal pensions. They intended to always be self-sufficient, the ANC government has made them paupers.

  • Lesley - 2012-02-27 20:30

    The ANC wanted to take control of SA not for democracy but because they thought there was an unlimited supply of money. The people on the ground watch them spending freely and mistakenly think that there is an unlimited supply of money. The ANC will keep on spending until there is no more and we will be another failed African country.In fact we are fast approching this.

  • MduXman - 2012-02-27 20:35

    this is South Africa, am sure our government hates us. they keep getting worse. see me vote for them ever again, NEVER!

  • albevdm - 2012-02-27 23:13

    A fine is a tax for doing bad. A tax is a fine for doing well.

  • Shaun Burr-Dixon - 2012-03-14 08:16

    There isn't much we can do without hurting ourselves. We as South-Africans are too stubborn to even think about agreeing on something and making a strong movement against our government. Like the author said we are a stretched out rubber band ready to snap,something will happen soon and it wont be pretty.

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