EDITORIAL: Eskom hike stokes fires of revolt

Is Eskom’s 18.6% increase — for an essential service it delivered only about half the time last week — going to be the straw that breaks the overburdened camel’s back?

South Africans have already swallowed electricity price hikes of about 650% since 2007, with general consumer inflation up just 129% over the same period.

If Eskom isn’t prevented by a multitude of court challenges, launched by the DA and others, it means we’ll be paying 777% more for our power than we did in 2007 — R1.73 per kilowatt-hour, against 19c then.

The DA describes that price hike, granted by the National Electricity Regulator of South Africa last week, as “official sanctioned daylight robbery against citizens”.

And in a separate challenge, a group of law firms instructed by Bantu Holomisa and Mmusi Maimane, among others, have sent a letter of demand to public enterprises minister Pravin Gordhan and Eskom CEO André de Ruyter to end power cuts “with immediate effect”.

The state has “failed to reasonably manage the grid”, the lawyers say, and they have now demanded a halt to the planned price hike and compensation for those who have suffered “quantifiable financial losses” due to the blackouts. 

The law firms shouldn’t hold their breath.

Of course, if citizens were actually receiving power, you’d still hear some grumbling about the price hikes, but nothing compared to the agitation now building in civic and business circles as more businesses sink under the intolerable strain of relentless blackouts.

Certainly, President Cyril Ramaphosa’s administration has skirted a tax revolt for some time now, as discontent has mounted over the years of ANC misrule. Today, there is a tangible reluctance to pay more to a government renowned for misspending its revenue on vanities, such as VIP protection for politicians (R1.7bn last year), excess staff at state-owned entities, or a state bank (to replicate the work of the Postbank.)

Tax revolts have a long and impressive history, dating back to the Maccabee tax revolt in Judea from in 160BCE, stretching through the great Spanish revolt against Charles V in 1520 to the Californian revolt of 1978 by the United Organization of Taxpayers. 

And while this is an exceedingly rare phenomenon, South Africa has in fact already experienced its first successful tax revolt, as the ANC government (as much for reasons of populism as anything) agreed to finally scrap the ill-fated e-tolls scheme late last year.

A paper by University of Pretoria academics in 2021 concluded that “all the economic factors identified from history are currently present in South Africa, indicating the imminent possibility of a tax revolt”.

The five necessary factors are: high unemployment (now at 32.9%); soaring household indebtedness; income inequality (the highest globally, according to the World Bank); high inflation (7.4% at last count); and an excessive tax burden.

Those academics argue that to mitigate the threat of a revolt, fiscal policy needs to “earn credibility” by prioritising growth-enhancing spending, and measures need to be put in place to “raise the income and living standards of South Africans”.

But what the country absolutely cannot afford now is for those who pay the government’s bills to feel they’re sinking money into the pockets of cronies, and getting less than nothing in return. Accountability for public spending, in this context, is vital — yet Eskom, and the government, hasn’t demonstrated any inclination to be held to account for this immense disconnect.

The warning lights are blinking.