RFA spells out benefits of fuel levy versus tolls

The Road Freight Association has once again rejected the toll road system in favour of a fuel levy for maintaining and developing the country’s roads. The issue predictably took centre stage at the association’s recent AGM where chairperson Frank Wagner told delegates that toll roads would result in motorists paying 11-17% higher fees. Greg Volkwyn of 94.7 Highveld Stereo said a levy would be far more affordable and sustainable into the future. “The road freight industry has already said it is paying through levies, through tolls, through permit fees, licence fees, and general taxes – and the rate of payment seems to be increasing although the funds don’t seem to be going where they should be,” argued Volkwyn. Marissa Moore, acting chief director of the National Treasury, agreed that a straight government tax would be a better solution and the most efficient way to collect money to fund roads. However, she noted: “The problem with the straight tax is that the level of income in the country is not able to fund the level of infrastructure needed by industry. “This country can afford R101s, but for main highways we need to find a way to pay for them. So what we are saying is that a mileage-based user fee is the most appropriate way of collecting funds.” Dawie Roodt, chief economist at Efficient Group, said that state expenditure was moving away from capital expenditure to social expenditure. “The best way to collect funds for infrastructure is through a toll system – theoretically. However, our taxes increase and we are getting less in the way of capital expenditure.” He said ring-fencing had been tried in other sectors, but there hadn’t been the correct amount in the pot for our expenditure requirements. “So my answer is: Yes let’s use toll roads to fund infrastructure but then we need a tax reduction as well.” However, he asked: “Who is going to pay? HGVs and operators will just end up passing the high costs onto their customers.” RFA board member Garth Bolton believes the collection methodology is a major issue. “On the toll roads on which we travel we pay about 25c per km for HGVs. We are now expecting costs of R2 per km, so that is eight times more. It is extremely expensive,” he said. “The problem is the collection methodology. We believe that if infrastructure funds were collected on a fuel tax we would have almost no increase in cost. “Collection as we see it is extremely inefficient.”