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Carbon Tax - Solution or Bad Joke?

May 28, 2019

 

The long-awaited carbon tax has finally arrived.  With the signing of the legislation last week by President Ramaphosa, consumers will feel the pinch from 1 June as prices of a number of goods will increase to accommodate the tax.  What many have perhaps overlooked is that this tax has been introduced just two weeks after the general election – something that would certainly have been felt at the polls had we known before the 8th of May!

 

Petrol will increase by 9c a Litre, while diesel rise up by 10c a Litre and the inevitable knock-on effect will be felt from transport to most consumer goods as suppliers and manufacturers simply pass the increased costs they face to us.  With emissions from diesel vehicles outstripping those of petrol vehicles, the disparity in tax escapes me completely. At this stage, Eskom is being prevented from adding the tax to consumer accounts, but don't hold your breath!

 

While the Carbon Tax regime is intended to force manufacturers and polluting industries to clean-up their act, these businesses will feel absolutely no impact of this tax for as long as consumers are forced to pay it directly.  There is no incentive to clean the petroleum or energy sectors while those responsible for the carbon and emissions aren’t directly taxed by government.  By forcing polluters to pay the tax based on their income or production levels, government would have ensured that ‘dirty’ industries make changes to their processes and plant to reduce emissions at source.  Understandably, consumers would bear the increase through the till as companies increase the price of their products, but at least corporate profit tax would help manage and mitigate increases. This is just another example of a totally subservient society simply and silently accepting yet another blow. 

 

I am all for polluters to pay for emissions and clean-ups – and I accept that as a motorist, I should make changes to my travel patterns to reduce my personal emission levels, but while there is a total lack of appropriate, efficient and organised public transport alternative to using my own car, why should I or other consumers be punished by government for their obvious lack of planning?  Those that have dreamt this tax regime up are of the opinion that consumers must simply change the way that they travel to reduce emissions. But they forget the fact that we have very few alternatives.  Emission-free vehicles are taxed at over 50% in import duties; there are no public charging stations for electric cars; most cities and towns lack efficient public transport alternatives; domestic solar systems are priced beyond the normal household and government has been perhaps the slowest in adapting to the challenges posed by climate change in general.

 

With the largest fleet of vehicles in the country, the Government impacts the environment from fuel emissions perhaps more than most, but unlike us mere mortals, their tax will be paid from our fiscus – each of us indirectly, and they will not feel the pain in the least.  The taxi industry is perhaps the largest private sector polluter in terms of emissions, and just as was the case with e-Tolls, we can expect government to exempt taxi’s from the tax (or to receive offsets for the cost) or face unrelenting unrest.

 

At this stage, the tax will affect the petroleum and energy sectors first – with heavy industry coming on-line at a later stage.  But these industries impact consumers directly and perhaps it is time that we stood together to denounce this never-ending stream of taxes and levies that we are being asked to carry.  Simply changing our consumption patterns is not the answer because as we have seen with Eskom and other SOE’s, this has not stopped price increases or reduced overall consumption.

 

If Government is committed to making a difference - and in meeting its international obligations in terms of climate change, it will take more than a simple band-aid to reduce and manage emissions.  It will take a total rethink on placing responsibility for change where it belongs - on the polluter. Until then, the Carbon Tax is really nothing more than a bad joke. 

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