AfriForum welcomes cuts to fuel levies but demands deeper-reaching reform

Soundbite: Louis Boshoff (English)
Soundbite: Louis Boshoff (Afrikaans)

AfriForum welcomes the decision by Minister of Finance Enoch Godongwana to implement a temporary reduction in fuel levies. The decision was announced today during the Medium-Term Budget Policy Statement (MTBPS) and follows months of pressure from AfriForum and other organisations for the review of fuel levies. AfriForum emphasises that this reduction must, however, be accompanied by more fundamental reforms regarding how the government utilises tax revenue.

According to AfriForum, the MTBPS contains a number of sensible decisions, but the organisation believes that, on its own, these cannot fully alleviate the plight of consumers. AfriForum welcomes Treasury’s plans to curb harmful online gambling and to review the proposed approach to crypto-regulation. While this indicates that Treasury is asking the right questions, it remains unclear whether future regulations will ultimately be successful. Earlier this year, AfriForum submitted comments on draft regulations regarding capital flow management, which would have substantially restricted the freedom of individuals to trade in cryptocurrencies.

Furthermore, AfriForum maintains that the Minister failed to address certain critical issues today – including municipal spending.

Louis Boshoff, an AfriForum Spokesperson, notes that although it was stated that action and better adherence to regulations would be required from municipalities, no concrete measures have actually been announced. “Municipal spending remains an unresolved, contentious issue. Nevertheless, the allocation earmarked for local government has been increased to 10% of the total distribution. Moreover, an additional R3,5 billion – on top of the existing R2 billion – is being allocated for so-called ‘smart meters’ to secure further revenue for municipalities. This still leaves the door open for municipalities to prioritise salaries over infrastructure upgrades,” warns Boshoff.

AfriForum is once again calling on the government to curb mismanagement and reduce the stifling over-regulation of various economic sectors. “The fact that the Minister can boast of government debt having stabilised amidst a difficult economic climate is thanks to the resilient private sector and the hard work of law-abiding citizens,” says Boshoff. “The reduction in fuel levies is a step in the right direction, but effective policy and state management must now follow – measures that reward citizens and further unlock the potential of the private sector.”

According to Boshoff, the Minister makes numerous promises regarding policy and governance intended to promote economic growth; however, it remains to be seen whether the government will actually deliver on these commitments. “It is difficult to believe such promises when, almost every week, we see reports of ministers staying in luxury overseas hotels while accompanied by massive delegations. If the government is serious about responsible spending, such conduct must cease – along with numerous other forms of wasteful expenditure,” concludes Boshoff.

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