E-tolls will kill people: economist

Economist Mike Schüssler has warned that heavily indebted consumers who go against getting an e-tag might end up in a ‘debt trap’ as the bills start to pile up.

Schüssler, an economist at Economists.co.za was speaking to Moneyweb.

While the controversial Gauteng e-toll system went live on 3 December, conflicting reports have have surfaced regarding the number of people who have bought an e-tag which enables a substantial fare reduction, and a cap at R450 per month.

According to the latest figures released by Sanral, Gauteng road users have purchased 890,388 e-tags, to date – almost 40% of the 2.3 million monthly road users in the province.

However, Opposition to Urban Tolling Alliance (Outa) said it had conducted its own research, finding that the true penetration figure to be as low as 350,000, or 15% of Gauteng’s road users.

Sanral quickly moved to dismiss Outa’s claims.

Tembakazi Mnyaka, chairman of SA National Roads Agency Limited (Sanral), recently said that road users will be “hugely” surprised by the “relatively insignificant” effect e-tolling will have on their pockets.

“There is also a cap of R450 a month and it has been calculated that less than 1% of road users will pay that sum. Almost 83% of all road users will have to pay less than R100,” Mnayka said.

However, the numbers released by both Sanral and Outa suggest that many motorists have yet to get an e-tag, with the majority seemingly in protest against a system they feel to be unjust.

Schüssler told Moneyweb that indebted consumers were not in any position to absorb the cost of e-tolls, especially those who are not tagged.

“They are going to kill the South African economy if the costs are not capped and people have to pay more than five times the discounted tariffs. It will kill people,” he said.

The economist said that motorists would have to sacrifice a large portion of their disposable income.

“That will slow down spending in stores and also delay bigger purchases that drive economic growth,” Moneyweb quoted Schüssler as saying.

“If they don’t bend to the South African National Roads Agency’s (Sanral) will, they might land in an e-toll debt trap that will be hard to get out of – because, for most motorists, e-tolls is a recurring cost and their situation will worsen every day as they travel to work to earn a living,” Moneyweb said.

A survey by the Institute of Race Relations, in January, showed that Gauteng has the highest consumer debt per capita of all nine provinces and accounts for almost half of total consumer debt held in SA.

Nomsa Motshegare, CEO of the National Credit Regulator, has warned against the reckless spending over the festive season after statistics published by the credit bureau for the quarter ended September 2013 indicate that consumers are drowning in debt.

More on etolls

Sanral stands by e-tag sales figures

SA’s most indebted province

E-tolls will force SA middle class into poverty

E-tolls are cheap for users: Sanral

South Africans short sighted on e-tolls: economist

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E-tolls will kill people: economist