Monday, 27 October 2014

Press statement: E-tolls killing jobs throughout Gauteng

Democratic Alliance press statement by
Toby Chance MP
DA Shadow Minister of Small Business Development 

E-tolls killing jobs throughout Gauteng

27 October 2014
Release: immediate

Note to editors: This statement was delivered to members of the media at a press briefing hosted by DA Shadow Minister of Small Business Development, Toby Chance MP, DA Parliamentary Leader, Mmusi Maimane MP, DA Shadow Minister of Transport, Manny de Freitas MP, and DA Gauteng Shadow MEC for Roads and Transport, Neil Campbell MPL, this morning. A spreadsheet detailing the costs breakdown is attached here.

The Democratic Alliance today announces the initial findings of our survey on e-tolling’s impact on small businesses.

The results confirm what the DA has said all along – e-tolls are killing jobs and businesses in Gauteng.   
Following the DA’s call for small businesses to make their voices heard against e-tolling, information from enterprises across the province was sent to us in this first phase.

The information included monthly breakdowns of the cost of e-tolls for businesses since January this year.

The results so far reveal the e-tolls bill, for a sample of 50 small businesses, amounting to R850 000 so far this year.

The highest cumulative bill incurred by a single enterprise was a staggering R101 761, 83. That is over R10 000 per month.

In dealing with this unnecessary financial burden, businesses have indicated various responses to us. 

Some have chosen to transfer this incurred cost to their clients, while others have opted for retrenchments. Some have even scaled down their business models.

The effect is simple and straight forward – the growth prospects for business and their ability to create jobs is severely hampered. 

The following individual accounts are of significant interest;
  • A small family run transport company which has been operating for more than 50 years stated that e-tolls was costing the company an extra R5000 a month. This has led to a loss of clients in Pretoria due to the fact that they cannot afford their transport services.
  • Another small electronics business with 3 service vehicles on the road currently sits with an e-tolls bill of R32 000, which has not been paid to date. The owner said that he will most definitely have to scale down in terms of the number of vehicles on the road, which will inevitably result in the retrenching of an employee.
  • A small chemicals company has felt the impact of e-tolls quite substantially, with an increase to the cost of every delivery by at least 100%, which in effect means that the total cost to clients will increase by nearly 15%. In a price-conscious market, less people will continue using their chemicals, therefore reducing their turnover. The owner further stated that he cannot afford e-tolling and so bills go “straight into the bin”, leaving the owner under threat of prosecution
While these results are a small sample, covering 50 small businesses in Gauteng, one can only imagine the impact e-tolls is having on the 1000’s of other businesses and companies throughout the province. 

There is the example of a large corporate, Shoprite, which ran up a R4 million e-toll bill within the first 4 months of the system coming into operation.

In order to put consistent pressure on government to end e-tolling, we invite small businesses to continue sharing this information with us. Now is the time for people to stand up in support of growth and jobs, and against e-tolling.

In a country in which 35% of the population cannot find work, unemployment is a national crisis. 

Small and medium enterprises (SMMEs) are crucial to the country’s economy as they contribute 57% of the gross domestic product (GDP) and account for 56% of employment. 

Moreover, SMMEs are expected to create 90% of the jobs required to meet the National Development Plan’s objective of 11 million jobs by 2030, and therefore the success of these businesses is crucial to the fight against unemployment. 

On this note, it is deeply ironic that the ANC government champions small business as the chief creator of jobs, but then implements a scheme which hinders the advancement and success of small businesses. 

The reality is that tough times for business mean less jobs and higher prices for everybody.

We will never make significant inroads into the 35% unemployment rate if businesses are being forced to increase costs and cut staff to fund e-tolls.

It is of particular concern that the Minister of Small Business Development, Lindiwe Zulu, recently declared her support of e-tolls, by stating that the ministry stands by government on the issue of e-tolls.

As the department tasked with carrying the hopes of small enterprises and the dreams of countless unemployed, it was meant to spearhead the job creation effort by making it easier for small businesses to start and thrive. 

Sadly, the very opposite is occurring, as so aptly demonstrated by Minister Zulu’s in her support of e-tolls.

The DA will continue to be the vanguard of small business development and advocate measures which make it easier for small businesses to grow and thrive.

The same ANC who brought e-tolls to Gauteng must be reminded by the people that we want this system scrapped, and soon.

Media Enquiries: 

Toby Chance MP
DA Shadow Minister of Small Business Development
083 251 5613

Graham Charters
Media Officer

072 635 0440 

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