unreasonable prices' days are numbered

unreasonable prices' days are numbered


October 7, 2004

By Lynda Loxton

Johannesburg - Cabinet yesterday gave the go-ahead for a crackdown on unreasonable increases in administered and regulated prices out of line with inflation targets or actual service delivered by the parastatals involved.

This would be accompanied by the release of an administered price index by Statistics SA to monitor trends, cabinet said in a statement in Pretoria.

Long the bugbear of people such as Reserve Bank governor Tito Mboweni - who has often complained that he had "stopped talking" to parastatals about the effect of unreasonable price increases because they just did not seem to hear him - administered prices have been the major obstacle (until recently) to achieving inflation targets.

Cabinet yesterday received a comprehensive report on administered and regulated prices in the electricity, communications, transport, water, health and education sectors.

It was observed that there might be excessive prices in some sectors, for example telecommunications, or unsustainably rapid increases in others, such as health insurance. In yet other sectors, there might be inadequate cost recovery, as in water resource management, the statement said.

It was agreed that a system would have to be put in place to strengthen the regulation of prices backed by "better analytical expertise and reliable and timely information".





It would ensure that "price-setting should take into account inflation targets for the period ahead, as well as efficiency, equity objectives, long-term demand and supply and other policy considerations", said cabinet.

In addition, there would be "a regular review of underlying costs and productivity trends, and monitoring of service delivery outcomes and financial performance of public utilities".

It also accepted an invitation for South Africa to take up the presidency of the Financial Action Task Force, an independent international body responsible for setting standards to combat money laundering and the financing of terrorism.

Former education minister Kader Asmal had been selected to hold the presidency from July 2005 to June 2006.

Cabinet, considering a report on the Tourism Global Competitiveness Study, agreed to work at improving tourism's contribution. To speed up the grading of accommodation and tourism sites, departments had been urged to procure accommodation only from establishments graded by the grading council.

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote">Cabinet yesterday received a comprehensive report on administered and regulated prices in the electricity, communications, transport, water, health and education sectors.<hr height="1" noshade id="quote"></blockquote id="quote"></font id="quote">
Well I don’t believe it.

Since the year 2000;
Rates and Taxes has gone up 300%
Electricity has gone up 200% and
Water has now jumped by 500%

Also since 1993;
Refuse that was collected twice a week at R9.00 a month is now R48.00 per bin once a week. Also the council does not collect garden refuse anymore. So the service has gone up 500% in price but declined by two thirds in value.

Road upgrades that were budgeted for in our area were cancelled and the funds transferred to other projects. So an increase of 300% in Rates and Taxes mentioned above has brought no extra value to our area. In actual fact for the 300% increase we now receive just about nil in Capital Expenditure.

The list goes on. But the overall higher increases IMO stem from Government Departments and not the public sector.

A stark contrast one could make was the City of Cape Town's explanation of why the price of water must be doubled from R8.50 a KL to R17.20 a KL. It was in the year 2000 about R3 or R4 a KL and doubled to R8.50 a KL to try and penalise people that use a lot of water. Now they say in 2004 the increases is because of the 20% savings needed on water consumption will drop their revenue by R100 million for the year, because of the low dam levels in the Western Cape.
The rest of us poor humble souls must carry on and accept losses in our businesses. Imagine if I increased the price of my goods by 200%, because I will be selling fewer products. The public will walk out my business. Yet the Council can charge what they deem fit with hardly any or no public participation in the matter. Certain businesses like people that install irrigation systems have had to lay off all their staff and look at other means of making an income. No sympathy, consultation or compensation is directed at them.

Each state department in our country has systematically over the last 10 years slowly introduced higher and higher pricing. They have also introduced new fees, permits and levies to make revenues to fill state coffers. Perhaps in many of these cases no public participation was entertained. One only has to look at the levies and taxes charged on petrol plus the 14% Vat we have to pay on everything we buy.
A saying comes to mind. "The apple does not fall far from the tree."
Don't look too far, to see who is exerting the inflationary pressure in SA.



<b><hr noshade size="1"></b><font size="2"><font color="red"><b>You can take Telkom out of the Post Office but you can't take the Post Office out of Telkom.</b></font id="red"></font id="size2">

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote"><i>Originally posted by BTTB</i>
Each state department in our country has systematically over the last 10 years slowly introduced higher and higher pricing. They have also introduced new fees, permits and levies to make revenues to fill state coffers. Perhaps in many of these cases no public participation was entertained. One only has to look at the levies and taxes charged on petrol plus the 14% Vat we have to pay on everything we buy.
A saying comes to mind. "The apple does not fall far from the tree."
Don't look too far, to see who is exerting the inflationary pressure in SA.<hr height="1" noshade id="quote"></blockquote id="quote"></font id="quote">
All I can say is that you reap what you sow. The government still has the cheek to ask "white" people not to leave the country.
Too few "haves" and too many "have nots". Did I tell you about Robin Hood...? [8]

Well the sad situation is, as a fairly intelligent and relatively well paid systems administrator, I can't afford to buy a house myself. At least not this side of Kraaifontein. When I can earn more than enough to do so in a foreign country should there be any surprise that I have contemplated leaving?

Government is currently dissuading foreign investment with all their high prices, rates, taxes and everything else slapped onto the general public. Why would anyone in their right mind come to South Africa?

1) To be ripped off with of the highest fees in the world for communications and internet access?
2) To be ripped off by paying more than most other countries for cars?
3) To be ripped off by banks and their high charges?
4) To be ripped off by insurance with their massive monthly rates?
5) To be ripped off by councils with their ridiculous rates?
6) To be ripped off by paying R4/L of petrol of which a third is Gov tax?

No one will come here just for biltong and black label, Government needs to shape up and attract foreign investment ASAP and turn SA into the destination of choice for foreign companies, and the easiest way to kickstart that is by lowering the cost of telecommunications to be on par with countries like Oz and the UK - then people will start coming to SA very quickly. We have the people & skills, we have the infrastructure, <b>we have everything except reasons for people to come to SA</b>. We all want the same thing, for SA to prosper and the unemployed and disenfranchised to be able to create a decent life for themselves.. it can't be *that* difficult can it? Why lower prices next year? Lower them now! And why touch tomorrow? Rather touch today and tomorrow will be sorted when we get there! Or am I dreaming?


<font color="navy"><font size="1"><b>Where others have progress, we have Telkom.</b>
Hellkom website - www.hellkom.co.za</font id="size1"></font id="navy">

Who else do you think is going to pay for all the squater camps 'stealing' tons of water, Mega Watts of electricity, Copper Cables and all the tax evasion? It's a vicious cirle: The hard workers have to earn more money so they(we) can pay the taxes/bills so that the poor(uneducated/lazy/illegal immigrants) can survive.

That's a bit of a harsh opinion RoosTa, most people living in squatter camps have not had access to the same oppourtunities for education and work that we have. I have no problem with my taxes going towards educating and empowering the previously disadvantaged, however that clearly isn't happening. I'd love to have available a breakdown as to what percentages of our taxes go to which goverment programs (or officials salaries).

For those who have wondered where your tax money is going and the "value" you get for it, just remember, it's PAYBACK time! [8]

I don't really agree with RoosTa but the illegal immigrants do really bother me. They so anoyying, most of them are abt 30'ish and don't do anything but collect. They come every freaking day and knock on the doors. Then they try and use religion to get you to give them sumthing. The government should really improve on their border conditions. We have enough problems as it is.

..- dot dot dash

I know a guy in a credit finance department, the amount of people with council salaries exceeding R60,000 per month is shocking him. I've know idea what they do but they cannot all be top brass. Frankly unless you pull in R15,000 or more you cannot live here.

I feel for the poor here, the ladder seems to have well and truly pulled up. How is the ANC going to improve their lives when nobody wants to invest? The only true job creation here is going to be by bloating goverment departments (and increasing taxes to pay for it...) If you look at the costs here, you may even be better shifting your business to the USA. Why open a factory here when you can open one in Slovenia which is within the EU? Or Bulgaria , joining in 2007?

There is not a single reason to invest here.

I also recall an amount of some R500m spent a couple years ago on a Boeing 747 for the top SA government officials. That amount of money can go a long way to building infrastructure.... But then it's more important for Mbeki & colleagues to fly in their <b>own</b> Boeing rather than fly SAA or invest in infrastructure to uplift the poor.
The problem is that the government <i>should</i> be run like a company with good principles, but it isn't. Instead, it is run by a train driver, a gravy train driver, who's more interested in partying than tackling the real issues at hand...[8]

When I initially saw the first posting on this topic, I had the premonition that the subject matter would inevitably lead to misguided responses founded on political ideology and populist sentiment of the factional kind - it is somewhat disheartening to be proven right, given the content of such postings seen in the light of the aims and objectives of this forum.

Issues of Government mismanagement, irrespective of context, are as far removed from the original post as you can imagine - if all posters read it carefully, you will note that it's clearly a report on an attempt to actually manage properly, not the other way around. Methinks we would be far better off considering ways and means to assist and aid the principle/policy/process/procedure and practice - there's also another 'p' involved, people: <u>P</u>ositive thinking!

Good observation MBS.

I agree with you.

I appeal to the forum members (me incl) to just use this thread as "read only".
Besides it has nothing directly to do with ADSL, other than to detract from the issues we as a forum have with Telkom and ICASA.


<b><hr noshade size="1"></b><font size="2"><font color="red"><b>You can take Telkom out of the Post Office but you can't take the Post Office out of Telkom.</b></font id="red"></font id="size2">

the reason i posted this article is to highlight the following

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote">
It was observed that there might be excessive prices in some sectors, for example telecommunications,
<hr height="1" noshade id="quote"></blockquote id="quote"></font id="quote">

and this is good news because this puts eskom telkom and transtel in the firing line to be made examples of ...

there are problems with service delivery in genral and we have opinions arround this but it is nice to see we are been listened to. ...

if I might butt in .. you guys have to realize that this is an open forum and any issues relating to prices and the south african consumers will most likely evolve into some sort of political / racial discussion ... a simple search of the forums will confirm this ...

Having said that I know how irritatting it can be when you are having a converasation and people just take it so far off track that it hurts ...

We are Telkom - Resistance is Futile - You will be Assimilated

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote"> the reason i posted this article is to highlight the following

quote:
It was observed that there might be excessive prices in some sectors, for example telecommunications,



and this is good news because this puts eskom telkom and transtel in the firing line to be made examples of ...

there are problems with service delivery in genral and we have opinions arround this but it is nice to see we are been listened to. ...<hr height="1" noshade id="quote"></blockquote id="quote"></font id="quote">

Looking at it from that point of view, the thread is very relative.

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote">
Having said that I know how irritatting it can be when you are having a converasation and people just take it so far off track that it hurts ...<hr height="1" noshade id="quote"></blockquote id="quote"></font id="quote">

I'm sure we are all a bit guilty of this.
I myself have posted threads completely unrelated to ADSL and over the last 6 months of being a member of this forum I found MyADSL a welcome place to vent your frustrations. Expressing ones feelings is a modern day trend. But like me, we often detract from the issues at hand.


<b><hr noshade size="1"></b><font size="2"><font color="red"><b>You can take Telkom out of the Post Office but you can't take the Post Office out of Telkom.</b></font id="red"></font id="size2">

To further detract
ADSL is crippled, overpriced tripe costing 4X more for 4X less,
SBC should bugger off back to the States - the sooner the better,
Telkom and Government are both a flaming ripoff and are only self-interested - stuff anyone else.. no vision for South Africa whatsoever and a bloody embarassment, we're becoming the laughing stock around the world - from the mails I receive the foreigners can't believe what's going on!

Telkom's prices infringe on one's right to communication, which is <b>unconstitutional</b> and encouraged by money-hungry Government. Who's our Daddy? Governmeeeeeeent. Telkom is our soap and Government is standing right behind us. Bring the vasoline - they're keeping that soap on the floor..

<font color="navy"><font size="1"><b>Where others have progress, we have Telkom.</b>
Hellkom website - www.hellkom.co.za</font id="size1"></font id="navy">

Although the subject went off a bit, the fact remains telecoms are a key cost, whether you are an individual or a corp. Everything is pretty much interlinked somewhere and costs here are becoming crippling. I hope the government does get off its backside to do something.

Where possible we outsource to either the USA or Europe. We find the pricing easily beats SA and the QOS superb.

South Africa seems to be high pricing and no QOS. Now who does that remind me of.......

Well mad considering the statement that SBC made a while ago they might just bugger off when the going starts becoming not completely a downhill funnel into their pocket. Seems their the type of company that isnt willing to stay in a market and try and compete for a good service. they just want the easy cash makers.

Proud South african rip offs.

The media usually choose to publish excerpts of statements made, so as to pique your interest and retain readership/viewership. Sometimes they get it wrong, due to quoting out of context. Anyway, here's the original official statement that prompted Loxton's article - you'll note that it actually covers a lot more than just the question of administered prices, and that this single statement in fact generated quite a few diverse articles in different publications, according to the various newspapers I've read over the past few days:

http://www.gcis.gov.za/media/cabinet/041006.htm