The Congress of South African Trade Unions (COSATU) welcomes the Minister for Transport, Ms. Barbara Creecy’s bold intervention to stop yet another Fuel Levy hike and urges further relief for embattled commuters before the next fuel price adjustment at the beginning of November.
Workers and the economy have been reeling from the massive fuel price hikes this past year of over 25% for petrol and 50% for diesel.
These hikes have suffocated economic growth from an already weak 1.4% to 1.2%. They have pushed inflation up to 4.4% and a possible 5% next month. This has led to two painful repo rate hikes plunging workers deeper into unsustainable debt levels. Unemployment has risen to 43.8% over the past two quarters.
These are a direct consequence of the illegal war unleashed in the Persian Gulf this year.
COSATU commends the progressive intervention by the Minister for Transport to reject the callous request by the Road Accident Fund for an insensitive 75 cents per litre or 33% increase in the Fuel Levy. This would have been a devastating blow to millions of workers and commuters and the economy.
It is urgent that the corruption, wasteful expenditure and financial leakages that have become the norm at the RAF are dealt with. The appointment of the RAF’s new Chief Executive Officer is a positive step forward after years of state capture and corruption at the entity, including its reduction to a slush fund to feed the insatiable bank accounts of road accident lawyers.
Government must prioritise the RAF Bill’s retabling at Parliament to resolve the Fund’s structural faultlines, in particular to ensure its limited resources are directed towards providing relief to working class claimants and not the wealthy who can afford private insurance.
Compensation must be structured upon legitimate medical and loss of income claims and not be utilised to subsidise the wealthy and their fancy lawyers’ expensive lifestyles.
The initial fuel levy holiday provided by the African National Congress led government unlocked invaluable relief for struggling commuters and the economy during the outbreak of the war. It reduced inflation by 0.7%.
It is critical that Parliament expedite the passage of the Second Special Appropriation Bill providing R10 billion for the Central Energy Fund’s Equalisation Fund. This will enable government to provide badly needed Fuel Levy relief for commuters. This would reduce inflation and thus the likelihood of yet another devastating repo rate hike at the Reserve Bank’s November Monetary Policy Committee meeting.
For this to happen, Parliament must move with speed to pass the Bill before the end of October.
COSATU will continue to engage with government and Parliament to ensure these progressive interventions are expedited and happen. Workers cannot continue to tighten their belts.
Issued by COSATU