Gordhan must answer questions on the fiscal impact of e-toll debts

Tim Harris, Shadow Minister of Finance
4 May 2012

The result from the delay in Gauteng’s e-tolling will have important implications for South Africa’s fiscal policy, the funding of infrastructure, and National Treasury’s influence in government.

I have been informed by the Chair of the Standing Committee on Finance that Minister Pravin Gordhan will appear before the committee to deal with questions around the fiscal implications of the e-tolling debacle on Tuesday the 8th of May. At that meeting, I will ask the Minister to clarify Government’s position on these issues.

From a fiscal policy perspective - if National Treasury has to provide a backstop of taxpayers’ money for all of the South African National Roads Agency Limited’s (SANRAL) debt, there will be a material effect on the fiscal framework and key debt-to-GDP numbers. This will also raise questions about whether all debt issued by state-owned enterprises should be regarded as contingent liabilities for the national fiscus.
 
If they do not, then almost R8bn worth of unguaranteed government pensions will be at risk, and questions will be asked of the creditworthiness of other state owned enterprises that have gone to the bond market.

A Cabinet statement today mandates the newly formed inter-ministerial committee on the Gauteng Freeway Improvement Project (GFIP) to “move with urgency to ensure that SANRAL’s financial stability is not affected in any way”.  This mandate appears to confirm the speculation that every state owned enterprise has an implicit government backstop for the debt that they issue. If this is the case, the Finance Minister has to clarify the fiscal policy implications on Tuesday.

The post-cabinet briefing today seemed to suggest that the government is considering other options, outside of e-tolling, to cover SANRAL’s financial shortfall.

On Tuesday I will ask the Minister to shed light on what alternatives are being considered and whether e-tolling will be scrapped outright.