E-tolls causing retrenchments in SMEs
Small businesses in Gauteng have chosen to transfer this incurred cost to their clients, while others have opted for retrenchments to offset the costs of e-tolling in the province.
This is according to the initial findings of a survey on e-tolling’s impact on small businesses, conducted by the Democratic Alliance (DA).
“The results confirm what the DA has said all along – e-tolls are killing jobs and businesses in Gauteng,” said Toby Chance, DA shadow minister of Small Business Development at a press briefing on Monday (27 October).
The political party said that it’s data gathering included monthly breakdowns of the cost of e-tolls for businesses since January.
Initial results revealed that the e-tolls bill, for a sample of 50 small businesses, amounted to R850,000 so far.
The highest cumulative bill incurred by a single enterprise was R101 761, 83 – more than R10,000 per month.
“In dealing with this unnecessary financial burden, businesses have indicated various responses to us,” said Chance. “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 DA highlighted several individual accounts from SMEs:
- 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 R5,000 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%.
“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,” Chance said.
The DA also noted the example of a large corporate, Shoprite, which ran up a R4 million e-toll bill within the first four months of the system coming into operation.
The political party said that 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.
SMMEs, it added, are expected to create 90% of the jobs required to meet the National Development Plan’s objective of 11 million jobs by 2030.
“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,” Chance said.
Gauteng premier David Makhura set up a 15-person panel to assess the impact on e-tolls.
The outcomes of the panel’s hearings will be presented in a report to the Gauteng Provincial Legislature in November.
More on e-tolls
E-toll prosecutions a step closer: report
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