(Mori Yama / Flickr)
(Mori Yama / Flickr)
Finance Minister Tito Mboweni will become the fourth different person in five years to deliver the budget speech to South
The address promises to be another tough balancing act for him. The minister delivered the mid-term budget speech in October just two weeks after taking the job. Mboweni replaced Nhlanhla Nene when he was forced to step down, following a scandal with PIC investments. His new role was made even tougher by the fact Mzansi was in a technical recession.
But still, nothing can be worse than that baptism of fire, right? Wrong. Mboweni returns to the National Assembly in an even more compromising position. As well as being at odds with his own party over the future of South African Airways (SAA), it looks like he will have to announce a huge bailout for Eskom after a disastrous week.
That money has got to be found from somewhere, and it is looking increasingly likely that will come from the current fuel tax. And, more than likely, that means there’ll be a knock-on increase for the Road Accident Fund (RAF), which provides personal injury and, when applicable, death compensation to those injured in motor vehicle accidents provided the accidents weren’t caused solely by them.
They are funded solely by contributions from motorists filling up their cars with petrol and diesel. A chunk of that per-litre price stuffs the fund’s coffers, which is then used to pay out any successful claims. So when the petrol price rises, it’s likely that the RAF gets a bit more pumped into it, too.
The fuel tax is set to take a hit, purely because the form book says so. South Africa has experienced five consecutive years of hikes to its fuel levies, which has dragged the RAF along with it:
(All prices are based on the costs per litre of fuel)
The price of crude oil has dropped dramatically in the past six months. In fact, it’s even cheaper than it was last year. Of course, the government can’t have its motorists being in credit, and with less money being collected at the pumps, there’s more solid ground to implement a fuel tax rise.
Elsewhere, legal and political experts PwC addressed the media on Wednesday to talk about their forecasts for the upcoming budget speech. The firm told Business Tech they expect both the fuel and RAF levy to encounter significant increases. They predict fuel tax will rise by 15 – 20 cents, whereas the RAF levy could hit the 30 cent mark.