Latest news with #HouseholdAffordabilityIndex
IOL News
9 hours ago
- Business
- IOL News
Why the EFF went to court about the fuel levy, a regressive tax that punishes the poor and violates budgetary processes
EFF National Chairperson Noluthando Nolutshungu and Mathibe Mohlala, convener of deployers to the Western Cape, outside the Cape High Court where the Party challenged the legality to increase the fuel levy by the Minister of Finance who wants to raise extra revenue. Image: Ian Landsberg / Independent Newspapers By Carl Niehaus On May 21, 2025, South Africa's Minister of Finance, Enoch Godongwana, announced a 16-cent fuel levy increase as part of the revised 2025/26 Budget, breaking a three-year freeze on such levies. The government claims this will generate R4 billion in revenue, but at what cost? The Economic Freedom Fighters (EFF) have taken a bold stand, filing an urgent court application on May 28, 2025 in the Western Cape High Court to interdict this levy. The EFF argues that it's not only economically disastrous and regressive but also illegal and unconstitutional, as the Minister has bypassed critical budgetary approval processes. Moreover, the EFF's clarion call for a wealth tax offers a progressive alternative to fund public services without burdening the poor. This levy must be stopped, and here's why. The fuel levy is a direct assault on South Africa's working class and poor, who are already buckling under a relentless cost-of-living crisis. The January 2025 Household Affordability Index paints a grim picture: a minimum-wage worker earns just R4,854.08 per month, with R2,802.97—57.7%—going to electricity and transport alone, leaving a mere R2,051.11 for all other expenses, including food. Yet, the average food basket costs R5,433.70, leaving these workers short by over R3,000 just to meet basic nutritional needs. In towns like Springbok, a single food basket costs R773.13—more than many can afford even weekly. Now, add the burden of this fuel levy. For a worker already on the edge, this increase could mean the difference between eating and going hungry, between getting to work or losing a job. The ripple effects of this levy are profound. It will drive up transport costs for commuters relying on taxis, buses, or private cars. It will increase the price of food, as transportation costs cascade through the supply chain, making essentials like bread and vegetables unaffordable for many. It will raise electricity costs, as diesel powers backup generators and critical infrastructure logistics, especially for off-grid communities and businesses. There is no 'zero-rating' escape from fuel costs—this levy will touch every aspect of life, and it's the poorest among us who will bear the brunt. Unlike VAT, which is charged at the point of sale, the fuel levy cascades through the economy, inflating prices at every level, whether you drive or not. It's a regressive tax that deepens inequality, exacerbating an already dire cost-of-living crisis. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading Regional disparities further highlight the injustice. South Africans are already paying up to R2 per litre more than our neighbours due to levies and taxes. In Gauteng, fuel costs R21.40 per litre, while in Botswana it's R19.50, in Lesotho R19.30, and in Namibia R20.67. Why are we being punished while fuel is supplied to these countries at lower rates? This disparity is a slap in the face to South Africans already struggling to make ends meet. The fuel levy's imposition is also illegal, and it cannot be implemented on June 4, 2025 because the Minister of Finance has bypassed critical budgetary approval processes mandated by South African law and the Constitution. Section 77 of the Constitution requires that any tax or levy, such as the fuel levy, must be introduced through a Money Bill passed by Parliament. This process ensures democratic oversight, transparency, and accountability, involving stages like tabling the budget proposal in the National Assembly, debates, committee reviews, public hearings, and a final vote by both the National Assembly and the National Council of Provinces. As of June 1, 2025, no Money Bill incorporating this levy has been tabled, debated, or passed. The May 21 announcement left less than two weeks for this process—a timeline that makes compliance with these constitutional requirements impossible. Public hearings, a constitutional necessity, have not occurred, and parliamentary committees have not had the chance to scrutinize the proposal or consult affected communities. This mirrors the unlawful process used in the rejected VAT increase, which the EFF also opposed. The EFF's court application argues that the Minister's actions violate the Constitution by sidestepping Parliamentary oversight and that the levy disproportionately burdens the poor, violating principles of fairness and equality. The legal challenge also highlights the lack of transparency—no socio-economic impact assessments or public consultations were conducted, and there's no evidence of a progressive fiscal policy review or exploration of alternative revenue sources. The broader context of the 2025/26 Budget reveals a troubling picture. The EFF, through Senior Researcher Dr. Gumani Tshimomola's presentation to the Joint Standing Committee on Finance on 28 May 2025, has rejected this budget as weak, misguided, and disconnected from South Africans' lived reality. Dr. Tshimomola emphasised that the National Treasury's fiscal framework prioritises neoliberal austerity over the needs of the people, undermining Parliament's constitutional role in budgeting. He stated: 'Parliament must reclaim its constitutional role in budgeting to ensure that fiscal policy serves the people, not the interests of capital.' He criticised the regressive nature of the fuel levy and the failure to explore progressive alternatives like a wealth tax—a long-standing EFF clarion call. A wealth tax on the richest South Africans would target the top 1%, who hold a disproportionate share of the nation's wealth, to fund public services without burdening the poor. This progressive measure could raise billions to support education, health, and social development, reducing inequality and fostering inclusive growth, unlike the fuel levy, which punishes the most vulnerable. Dr. Tshimomola's presentation revealed that between the March and May versions of the budget, over R28 billion was cut from non-interest spending, including reductions in education, health, social development, and the criminal justice system. These cuts weaken the state's ability to deliver basic services at a time when unemployment, poverty, and infrastructure collapse are at their worst. This is not a growth budget—it's an austerity budget that prioritises fiscal consolidation over the needs of the people. The government claims debt will stabilise at 76.2% of GDP, but this comes at the expense of investment in transformative sectors and job creation. South Africa spends over R382 billion annually on servicing a debt of more than R6.2 trillion, with little to show for it. More than 11 million people are jobless, despite the fiscal space to drive labor-absorptive growth. The budget fails to propose state-led industrialisation, doubling down on neoliberal policies that prioritise profit over national developmental interests. The Standing Committee on Finance's report on the 2025 Fiscal Framework, dated 1 April 2025, supports this critique, noting that the Treasury's austerity measures—through regressive taxes like the fuel levy and cuts to key sectors—hinder socio-economic rights and economic transformation. EFF President Julius Malema has been unequivocal: 'This fuel levy is a tax on the poor, plain and simple. The Minister of Finance is playing a dangerous game with the lives of South Africans, and we will not stand by while he pushes millions deeper into poverty.' We must ask the Minister: Why impose a levy that's just as destructive as the withdrawn VAT hike? Why not adopt a wealth tax instead? The EFF demands an urgent review of the fuel levy, transparent alternatives like a wealth tax to fund public services, and immediate relief for working-class families. This is not just a technical change—it's a tax that punishes the poor and violates our Constitution. We call on all South Africans to join this fight—in the courts, on the streets in the picket lines. The people united will never be defeated, and together, we will achieve economic freedom in our lifetime. * Carl Niehaus is an EFF Member of Parliament (MP) ** The views expressed do not necessarily reflect the views of IOL or Independent Media.
TimesLIVE
a day ago
- Business
- TimesLIVE
Reduce food prices and add food wastage laws, urges anti-hunger movement
With more South African families being forced to cut nutritious food from their plates because of rising costs, advocacy movement United Against Hunger has initiated a nationwide petition campaign to exert pressure on government and retailers to reduce food prices on nutritious best buys. This comes as the latest Household Affordability Index report by the Pietermaritzburg Economic Justice and Dignity Group (PMBEJD) showed a 3.1% year-on-year increase in core staples such as brown bread, cooking oil, maize meal, tea, potatoes, frozen chicken pieces, white sugar and sugar beans. United Against Hunger, which comprises the Nelson Mandela Children's Fund and the Healthy Living Alliance , is demanding through its petition that retailers drop food prices for '10 best buys' including rice, long-life milk, soya, eggs, tinned fish, dried beans, peanut butter, fortified maize meal, maas and lentils. 'These foods are full of protein and energy. That doesn't mean that other foods are not important. These foods could provide high nutritional value at the lowest cost, especially for families living below the poverty line.' The movement also called on government to implement legislation on food wastage in South Africa, saying companies 'can't just throw away fresh food when people go to bed hungry'. 'We demand more public engagement in the government's draft National Food Security and Nutrition Plan. Over the years, many organisations have built public pressure to increase and top up social grants. But even if we get the significant social grant increases we have been demanding, the cost of living will undermine these victories and keep people in poverty. The R370 [grant] is hardly enough to travel to a job interview or start a small business, let alone buy enough food for the month.' According to the Household Affordability Index, core foods are bought first to ensure families don't go hungry. 'When the prices of core foods increase, there is less money to secure other important nutritionally-rich foods, which are essential for health, wellbeing and strong immune systems. These include meat, eggs and dairy which are critical for protein, iron and calcium; vegetables and fruit, which are critical for vitamins, minerals and fibre; and maas, peanut butter and pilchards, which contain good fats, protein and calcium essential for children,' said Mervyn Abrahams of PMBEJD. The data shows that the core foods contribute 54% of the total cost of the household food basket. 'At an average cost of R2,955.34 in May, these foods are relatively very expensive in relation to the total money available in the household purse to secure food. These foods must be bought regardless of price escalations. 'The high cost of core staple foods results in a lot of proper nutritious food being removed off the family plates. The consequences of high costs on the core foods has a negative impact on overall household health and wellbeing, and child development,' said Abrahams. Overall the latest Household Affordability Index report, which tracks the prices of 44 basic foods from 47 supermarkets and 32 butcheries in Johannesburg, Durban, Cape Town,Pietermaritzburg, Mtubatuba in Northern KZN, and Springbok in the Northern Cape, shows that in May the average cost of the household food basket is R5,466.59 — a 2.6% increase from R5,330 a year ago. Foods that increased by more than 5% include potatoes, onions, tea, carrots, butternut, spinach and peanut butter, while items that increased by 2% or more include samp, frozen chicken portions, fish, wors, cabbage, bananas, apples, margarine and apricot jam. Abrahams said food is bought after transport and electricity have been paid for or money set aside. 'PMBEJD calculated that workers' families will underspend on food by a minimum of 45%. In this scenario there is no possibility of a worker being able to afford enough nutritious food for her family.'
IOL News
2 days ago
- Business
- IOL News
Food inflation hits hard: Household budgets feel the pinch as food prices jump
The May 2025 Pietermaritzburg Economic Justice & Dignity's Household Affordability Index reports a notable increase in the average cost of basic food items. Image: Tracey Adams/Independent Newspapers The May 2025 Pietermaritzburg Economic Justice & Dignity's Household Affordability Index reports a notable increase in the average cost of basic food items. Tracking prices of 44 food staples across 47 supermarkets and 32 butcheries in several cities, the Index reveals that the average Household Food Basket now costs R5,466.59, marking a R46.29 (0.9%) jump from April 2025 and a R136.29 (2.6%) rise from May 2024. Food inflation continues to be a critical concern as the Index indicates that of the 44 foods monitored, a staggering 33 items saw a price increase in May. Price escalations were particularly pronounced among essential staples, with onions surging by 23%, butternut rising by 9%, and carrots increasing by 8%. In contrast, only 11 foods registered a decrease in price, with rice witnessing a reduction of 5% and tomatoes dropping by 9%. The trend of rising food prices varies across different regions of South Africa. The Johannesburg food basket increased by R51.00 (0.9%) month-on-month, reaching R5,610.46. Meanwhile, Cape Town experienced the sharpest increase, with prices soaring by R112.62 (2.1%) from April to May. In stark contrast, the Springbok region saw a small decline of R28.90 (-0.5%) month-on-month, although its food prices remain 5.4% higher year-on-year. Statistics South Africa reveals that headline inflation for April 2025 stood at 2.8%, while food inflation reached a higher 3.3%. For households relying on the National Minimum Wage, which stands at R4,836.72 monthly, the financial struggle is becoming increasingly palpable. With the average cost for a basic nutritional food basket for a family of four estimated at R3,843.40, workers face a dire situation where essentials consume a majority of their income. The findings from this Month's Index further elucidate this concern. With transport and electricity alone taking up 56.3% of a worker's wage, families are left with only R2,113.75 to allocate for all remaining expenses, including food. Even allocating this amount entirely to food would provide a mere R528.44 per person per month—falling short of the food poverty line of R796. The implications for children are particularly troubling. The average cost to provide a child with a basic nutritious diet is now R979.66, while the Child Support Grant of R560 is significantly below the food poverty line, rendering it inadequate for meeting basic nutritional needs. The escalating costs emphasize the urgent need for policy responses to address food insecurity and support the most vulnerable sectors of society. Additionally, while the overall cost of household domestic and personal hygiene products saw a slight decrease of R3.58 (-0.3%) in May, the year-on-year increase underscores that these essential products continue to strain household budgets, further intensifying the financial burden on families. Cape Argus
IOL News
2 days ago
- Business
- IOL News
Household budgets feel the pinch as food prices jump in May 2025
The May 2025 Pietermaritzburg Economic Justice & Dignity's Household Affordability Index reports a notable increase in the average cost of basic food items. Image: Tracey Adams/Independent Newspapers The May 2025 Pietermaritzburg Economic Justice & Dignity's Household Affordability Index reports a notable increase in the average cost of basic food items. Tracking prices of 44 food staples across 47 supermarkets and 32 butcheries in several cities, the Index reveals that the average Household Food Basket now costs R5,466.59, marking a R46.29 (0.9%) jump from April 2025 and a R136.29 (2.6%) rise from May 2024. Food inflation continues to be a critical concern as the Index indicates that of the 44 foods monitored, a staggering 33 items saw a price increase in May. Price escalations were particularly pronounced among essential staples, with onions surging by 23%, butternut rising by 9%, and carrots increasing by 8%. In contrast, only 11 foods registered a decrease in price, with rice witnessing a reduction of 5% and tomatoes dropping by 9%. The trend of rising food prices varies across different regions of South Africa. The Johannesburg food basket increased by R51.00 (0.9%) month-on-month, reaching R5,610.46. Meanwhile, Cape Town experienced the sharpest increase, with prices soaring by R112.62 (2.1%) from April to May. In stark contrast, the Springbok region saw a small decline of R28.90 (-0.5%) month-on-month, although its food prices remain 5.4% higher year-on-year. Statistics South Africa reveals that headline inflation for April 2025 stood at 2.8%, while food inflation reached a higher 3.3%. For households relying on the National Minimum Wage, which stands at R4,836.72 monthly, the financial struggle is becoming increasingly palpable. With the average cost for a basic nutritional food basket for a family of four estimated at R3,843.40, workers face a dire situation where essentials consume a majority of their income. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ The findings from this Month's Index further elucidate this concern. With transport and electricity alone taking up 56.3% of a worker's wage, families are left with only R2,113.75 to allocate for all remaining expenses, including food. Even allocating this amount entirely to food would provide a mere R528.44 per person per month—falling short of the food poverty line of R796. The implications for children are particularly troubling. The average cost to provide a child with a basic nutritious diet is now R979.66, while the Child Support Grant of R560 is significantly below the food poverty line, rendering it inadequate for meeting basic nutritional needs. The escalating costs emphasize the urgent need for policy responses to address food insecurity and support the most vulnerable sectors of society. Additionally, while the overall cost of household domestic and personal hygiene products saw a slight decrease of R3.58 (-0.3%) in May, the year-on-year increase underscores that these essential products continue to strain household budgets, further intensifying the financial burden on families. IOL
The Citizen
5 days ago
- Business
- The Citizen
Household food basket shows food prices still increasing
While interest rates and fuel prices, as well as inflation, are lower, the picture for low-income consumers has not changed. The price of the household food basket for May shows that food prices for low-income consumers are still increasing despite the inflation rate slowing down. This means that low-income consumers can afford even less nutritious food. The household food basket is part of the Household Affordability Index compiled by the Pietermaritzburg Economic Justice and Dignity Group with the help of women who live in low-income communities where they shop at 47 supermarkets and 32 butcheries in Johannesburg, Durban, Cape Town, Pietermaritzburg, Mtubatuba in Northern KwaZulu-Natal and Springbok in the Northern Cape. The average price of the household food basket, which contains 44 food items, was R5 466.59 in May and cost R46,29 (0.9%) more than in April and R136.29 (2.6%) more than in May 2024. A total of 33 of the food items cost more than a month ago, while the prices of the other 11 items deceased. Foods in the basket which increased in price in May 2025 by 5% or more, include: potatoes (7%), onions (23%), tea (5%), chicken feet (6%), carrots (8%), butternut (9%), spinach (5%), and peanut butter (5%). Food items that cost more were samp (2%), salt (2%), frozen chicken portions (2%), soup (2%), Maas (4%), beef liver (3%), beef (4%), wors (3%), fish (2%), cabbage (2%), Cremora (3%), bananas (2%), apples (2%), margarine (3%), polony (3%) and apricot jam (2%). The food items in the basket which decreased in price in May include rice (-5%), tomatoes (-9%), oranges (-23%), white sugar (-2%), full cream milk (-2%), green pepper (-2%) and tinned pilchards (-2%). ALSO READ: Steep increase in price of household food basket means more people will go hungry Household food basket cost more everywhere except in Springbok The average total price of the household food basket increased in Johannesburg (by R51), Durban (by R2.64), Cape Town (by R112.62), Pietermaritzburg (by R6.33) and Mtubatuba (by R87.51), while the price decreased in Springbok. The food basket decreased in price by R28.90. Statistics SA's latest Consumer Price Index for April 2025 shows that headline inflation was 2.8%, while food inflation was 3.3%, and the producer price index for March shows agriculture was at 2.4%. However, despite the lower inflation, low-income consumers are still struggling to afford enough food for their families. Workers who earn the National Minimum Wage of R28.79 per hour or R230.32 for an 8-hour day. In May, with 21 working days, the maximum wage for a general worker was R4 836.72. Black South African workers usually support four people on one wage, which means that, dispersed in a worker's family of four, the wage comes to R1 209.18 per person, far below the upper-bound poverty line of R1 634 per person per month. ALSO READ: Household food basket: prices drop, but not for core staple foods Low-income consumers cannot afford household food basket The average cost of a basic nutritional food basket for a family of four was R3 843.40 in May. Using Pietermaritzburg-based figures for electricity and transport and the average figure for a minimum nutritional basket of food for a family of four, the group calculates that electricity and transport (R2 722.97) take up 56.3% of a worker's wage. Mervyn Abrahams, programme coordinator for the group, points out that workers only buy food after setting aside money for transport and electricity, leaving R2 113.75 for food and everything else. 'This means that in May we calculate that workers' families underspent on food by a minimum of 45.0%, having R2 113.75 left over after paying for transport and electricity. And with food for the month costing R3 843.40, there is no possibility of a worker being able to afford enough nutritious food for her family. 'If she uses the entire R2 113.75 to buy food, it will provide R528.44 per person per month for a family of four, again far below the food poverty line of R796.' ALSO READ: Consumer Goods Council calls for urgent expansion of zero-rated foods No money for nutritious food for children in household food basket He says women and children are particularly vulnerable. In May, the average cost to feed a child a basic, nutritious diet was R979.66, with an increase of R6.41 (0.7%) from April and R25.07 (2.6%) compared to a year ago. In May, the Child Support Grant of R560 was 30% below the Food Poverty Line of R796 and 43% below the average cost to feed a child a basic, nutritious diet of R979.66. It is clear that there is simply no money to feed children in low-income communities a proper, nutritious diet.
