14 October 2009

The IFP finds it outrageous that Nersa would grant Eskom a tariff increase of 45% each year for three years. This follows the tariff increase of 27% last year and 31,3% this year. As related to the original base this means an overall tariff increase of 508,4% over four years. The people of South Africa cannot afford this.

It is outrageous that the people of South Africa had no say in this form of indirect taxation without representation. When Eskom appeared before the Portfolio Committee it was allowed to refuse to tell Parliament how large a tariff increase it was requesting and to withhold a copy of its application to Nersa, even though the same application had been given to Salga and other stakeholders. Parliament could not debate this fundamental matter and was labouring under the impression created by press reports that a once-off 40% increase was being discussed.

This is nothing short of contempt of Parliament, the sovereignty of the people and the basic tenets of democracy. The people must now pay and shut-up, with no recourse. It is almost grounds for a tax revolt.

In fact this is a tariff increase in name only. In substance it is the mechanism through which a capital and infrastructure expansion programme will be funded. It could have been funded by other means, including a direct contribution through the Treasury by means of taxation, in which case the people would have had a say through the budgetary process and taxation would have been fair. This hidden form of taxation is unfair and unjust, because it is inherently regressive, forcing the poor to pay more than the rich.

This tariff increase will deepen our economic crisis as it will translate into an across-the-board increase in the cost of all goods and services with a compounding domino effect of foreseeable skyrocketing inflation. If the Government was trying to give a crutch to our stumbling economy, this act of folly kicks the crutch away.

There are other available options which have not even been considered, such as joint venturing with international finance corporations, or an international tender to create a duopoly with another entity to be funded by foreign electricity companies. We have maintained the old apartheid model of a monopolistic electricity generator, resorting to the dwindling finances of the middle class and small businesses to fund its voracious financial needs.

It is regrettable that there are no significant debates on this issue, which contributes to pacifying public opinion in the despair of impotence. On this, as on many other occasions, the SABC has fallen short of its responsibility, and we call on it to have a series of public debates at least amongst Members of Parliament to partially replace the failures of our democratic system to adequately air this matter, which has instead been dealt with behind closed doors.

Contact:
Dr Mario Oriani-Ambrosini MP,     082 556 0240 or
Liezl van der Merwe,                    083 611 7470.