Cape’s proposed petrol levy draws consumer criticism

Provinces find new ways to fill their coffers rAY SMUTS AS COSTS increase and central government allocations decline, provinces are having to find ways to fill their coffers. But the Western Cape’s decision to impose a 10c/litre petrol levy is not going to sit well with business or your everyday motorist, for that matter. To take effect in mid-2006, the levy could contribute an additional R300 million a year to the province’s finances. Lynne Brown, minister of finance, economic development and tourism, says the formula whereby funds are allocated to provinces by the national treasury needs reviewing. It is a fact that the so-called “’richer” provinces, including the Western Cape, are receiving less money from central government. The current formula indicates that financial input into the Western Cape will decline by an average of 1.4% on average over the next three years if inflation is taken into account What is more, this input does not provide sufficiently for the economic development role of provinces to encourage growth and job creation. Brown says the budget for the current financial year is R18.7 billion and that the province’s economy is expected to grow 3.2% this year, 4.1% in 2005/06 and 3.9% in 2006/07. Given central government’s shrinking allocation, it is projected that the Western Cape will be faced with a budget deficit of around R213 million in 2005/06, all the more reason why additional sources of income need to be found. “We cannot continue doing things in the same manner and expect different results,” she said.