Jun 15, 2012
The intriguing silence of business on user-pay principleBack
Africa|Defence|Environment|Projects|System|Waste|Africa|China|India|South Africa|United States|E-toll|Media Briefings|Infrastructure|Pravin Gordhan|Waste
© Reuse this
Finance Minister Pravin Gordhan has been left to lead the defence through court papers, as well as during media briefings relating to the proposed implementation of an electronic toll collection system to secure fees from users to pay for Gauteng’s upgraded motorways.
For him, it is about ensuring that the country does not foreclose on any of the possible options available to fund an investment programme that is arguably emerging as South Africa’s main growth engine in a context of serious global economic uncertainty.
Without doubt, the outlook in many European economies, which remain key trading partners, appears to have worsened materially over the past few months and many believe any economic recovery could involve five to ten years of painful convalescence. Growth rates in countries such as China and India are also slowing and there is also rising concern that the so-called 2013 ‘fiscal cliff’ in the US could put that vital economy, and by extension the rest of us, even further on to the back foot.
Gordhan has, thus, called for the e-toll emotion to be set aside and for South Africans to grasp that there are only “limited sources of funding from which we can pay for the things we desire”. User charges, he asserts, are a crucial element and have to be included in a mix that also comprises direct fiscal allocations, debt raising and public–private partnerships (PPPs).
“It is very important that the principle of user-pay and of user chargers is not undermined through this process and through the emotion, and that we are able to sustain our ambition to provide the kind of infrastructure that will impact positively not only on our economic potential, but also on the environment in which our people live,” Gordhan has argued.
One would have thought that organised business would have jumped to support Gordhan in this, particularly given that business is the champion of the PPP concept and PPPs can generally only take place in an environment where a user-pay ethos prevails.
Instead, business has been all but silent, having been seemingly swayed by those elements within its structures that prefer a payment method premised on adding to the overall tax burden.
Such a reaction is arguably only natural, given the vitriol surrounding e-tolling. But business organisations should not be surprised by future backlashes against PPP projects that will, no doubt, be premised on the user-pay principle.
Possibly, business has reached this seemingly contradictory position owing to the breakdown of the trust relationship between it and govern- ment.
Business has lost faith in government’s ability to deliver on its policy, is frustrated by the lack of PPP progress and is angry at the high level of waste and corruption surrounding the public sector and its projects.
In other words, a mist of mistrust has descended and instead of seeking to see through it, business has opted to settle into an oppositional stance that may well undermine its long-term interests.
Edited by: Terence Creamer© Reuse this Comment Guidelines (150 word limit)
Other Editorial Insight News
Recent Research Reports
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
This Week's Magazine
Three-dimensional (3D) printers being sold in South Africa by electronics distributor Rectron currently print in two types of plastic, but have a clear upgrade path over the next five years to eventually print in wood, ceramics and metal-alloy materials, says Rectron...
The world’s two dominant commercial aircraft manufacturers, Airbus of Europe and Boeing of the US, both recently announced that they had made record aircraft deliveries in 2014. Boeing set a global record for the industry with 723 commercial aircraft delivered, while...
The Western Cape is shifting further into the renewable-energy space with the official opening of a factory specialising in solar inverters, a key component of solar photovoltaic (PV) plants. The investment in the manufacturing facility in Cape Town aims to boost the...
Business Leadership South Africa (BLSA) last month welcomed Cabinet’s establishment of a technical team war room to undertake various interventions to improve electricity supply security over the short- and medium-term, but added that the private sector also had a...
Despite a rapid rise in mobile connections and the economic and social benefits of such connectivity, more than half of the world ended 2014 unconnected. For this reason, industry commentators believe the biggest impact of mobile technology is still to come –...