Taxi industry wants government to implement long-awaited subsidy
Critics say cash-strapped government cannot afford undertaking, given SA’s dire financial situation
SA’s taxi industry, which contributes R50bn a year to GDP and spends more than R20bn on fuel, says it still expects the cash-strapped government to implement a subsidy for the sector by April 2021, in line with transport minister Fikile Mbalula’s promises during the national taxi indaba last year.
President Cyril Ramaphosa, who addressed the indaba in October, said formalising the industry, which transports 16.5-million passengers a day, was a vital step to ensure it contributes to the national tax revenue base.
Mbalula gave an undertaking during the taxi summit that a subsidy for the industry would be introduced by April 2021. The government already subsidises rail and bus transport, including private bus operators.
The transport department had said it would reprioritise its budget to accommodate a subsidy for the industry. While it remained unclear what form the subsidy would take, it said frameworks had been proposed and that the best possible model would be selected.
However, critics have said the cash-strapped government could not afford the subsidy, given SA’s dire financial situation spawned by Covid-19.
The government cut budget allocation for 41 departments late last year to raise R10.5bn SA Airways needed to implement its business-rescue plan. The transport department lost R681m in the process.
The department received a R62bn budget allocation for the 2020/2021 fiscal year. However, this allocation was cut by R4.6bn during the special adjustments budget in June occasioned by the Covid-19 induced national lockdown that hit the economy hard.
Thabiso Molelekwa, spokesperson of the SA National Taxi Council, the country’s largest taxi organisation, said: “The government has not communicated with us to say they might not be able to implement the subsidy. We remain confident that the outcomes of the lekgotla will be implemented.”
Molelekwa said they would have formal engagements with the government soon on plans to implement the subsidy.
“They have not given us any reason to doubt whether the subsidy will be implemented or not. We don’t see any cause for alarm.”
Theo Malele, spokesperson of the National Taxi Alliance, SA’s second-largest taxi organisation which pulled out of the taxi summit at the eleventh hour due to their differences with Mbalula over the Covid-19 relief fund for the sector, said they would hold Mbalula to account if he failed to implement the subsidy.
Malele did not say what measures they would use to hold the transport minister accountable. Mbalula’s spokesperson, Ayanda Allie-Paine, did not respond immediately to a request for comment.
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