E-tolls will consume a large percentage of the discretionary income of Gauteng motorists even if they buy e-tags and register. Every cent of that portion of income not committed to essentials might be sucked up by the controversial system, says Mike Schüssler, from Economists.co.za.
Schüssler commented on the situation of Steven Roux* (27), a single retail manager who lives in Pretoria and drives to work in Kempton Park every day, using the R21 highway (one of the Gauteng highways subjected to e-tolls).
Roux takes home about R12 500 per month, R3 000 of which is used for petrol, R2 300 for rent, R1 300 for medical aid and R700 to insure his vehicle. He has some debt and a dog to take care of, which leaves him with R2300 per month discretionary income, to cover food, clothing, entertainment and unforeseen expenses.
He would like to live closer to work, but has not been able to find affordable accommodation in Kempton Park.
He is very upset about the extra burden of e-tolls, but has bought an e-tag. On the eve of toll commencement he tried to register the e-tag, but the website was overloaded. After a week he tried again, only tosee on the system that he already owes R220.
Roux is paralysed by the implication that his monthly expense will amount to R880. If he registered in time, it would have been R439. He decides to pay the outstanding amount at the end of the month.
Just to be on the safe side, he Googles the official tariffs and gets hold of the Government Gazette. After carefully studying the document he realises that unless he pays the outstanding amount within seven days of incurring the cost, punitive pricing will increase his monthly bill to R2 359 per month!
“I don’t have it!” he says.
Schüssler says many Gauteng motorists are in the same boat or even worse off than Roux. Last year the Uasa Employment report showed the average monthly personal income in the formal sector to be R14 504. Average disposable income (after tax, medical aid and some pension contributions) was R10 141 per month.
A gross salary of R14 504 left one with discretionary income, the amount left over after contractual payments, school fees, transport, food, TV and vehicles licenses and extra medical expenses of only R2 409.
He says the median monthly salary was lower at R11 000 at month and left most South Africans in the formal sector with a disposable income of less than R2 000 per month.
Even the discounted tariffs will absorb almost a fifth of Roux’s disposable income per month. If he doesn’t register, he will have to stop eating.
Sanral says less than 1% of motorists will incur the maximum cost of R450 per month for a light passenger vehicle, and 83% would only be paying R100 a month but that presupposes that motorists make use of registered e-tags.
All indications are that the levels of e-toll registration are currently very low. The punitive tariffs are not capped and seem to be more than five times the discounted ones, which means that 83% of road users might incur costs of more than R500 per month if they don’t register.
Schüssler said consumers are heavily indebted and hardly in a position to absorb the cost of e-tolls. “They are going to kill the South African economy if the costs are not capped and people have to pay more than five times the discounted tariffs. It will kill people,” he said.
The recent Finscope report has shown that about five million South Africans show signs of over-indebtedness.
There is a way out for Roux and thousands like him, but that means toeing the e-toll line.
New e-toll users qualify for a discount that brings their e-toll accounts in line with that of registered e-tag users, but only if they pay the account and register an e-tag. This is a once-off way of getting one’s e-toll affairs in order.
Motorists who pay their outstanding e-toll accounts within 30 days from the date of invoice qualify for a 60% discount. That would bring Roux’s monthly costs down from R2 359 to R944, which means he might eat pap, but what about the dog? If he pays after a month, but within 60 days, he qualifies for 30% discount, which leaves him with R1 651 to pay out of his R2 300 discretionary income.
Whichever way one looks at it, Roux and thousands like him will sacrifice a substantial portion of their disposable income, says Schüssler. That will slow down spending in stores and also delay bigger purchases that drive economic growth.
If they don’t bend to the South African National Roads Agency’s (Sanral) will, they might land in an e-toll debt trap that will be hard to get out of, because for most motorists e-tolls is a recurring cost and their situation will worsen every day as they travel to work to earn a living.
*Not his real name