Government sticks to user-pay principle

National Treasury has warned that ring-fencing funds for specific projects and departments may not be as beneficial as many believe. Organisations such as the Road Freight Association (RFA) and various economists have continuously called for the ring-fencing of funds when it comes to transport as this, they say, remains the most efficient and effective way of raising money for infrastructure rather than government’s preferred method of user-pay which is tolling. The argument is that a few cents on the fuel levy for example could easily have paid for the Gauteng Freeway Improvement Project rather than the complicated and costly tolling system that has to pay for the infrastructure improvements. But Marissa Moore, National Treasury’s acting chief director of public finance, urban development and infrastructure, says this is not as simple a solution as everyone thinks. “Treasury has a responsibility to ensure equality in the allocation of nationally raised resources on both a horizontal and vertical level. We also have to ensure that the funding source is sustainable. The buoyancy of the fuel levy does not make it a safe method of raising funds,” she said. “Treasury also has to ensure that the administrative cost of raising revenue is affordable. We also cannot just look at one road and focus money on that. We have some 2000 schools and clinics that have no access road, we have just as big an obligation to meet their needs as those of the commuters in Gauteng.” Moore said the money spent on the Gauteng Freeway Improvement Project was undoubtedly spent in an efficient way. “Let us not throw out the baby with the bathwater. This money was spent efficiently and in the right place. We must be careful to not hurt that which we do right because if we do, it is going to be a slippery slope down.” That did not mean there were not problems, said Moore. “Yes, government does not always spend money right. We have a history in the country of not spending our money well or at all in some cases.” She said in terms of an increased fuel levy to be used for the funding of road infrastructure, it was not a major consideration as government policy was still that of the user must pay. Caption: Marissa Moore ... We have a history in the country of not spending our money well or at all in some cases.