Straight Outa E-tolls — important lessons from the first taxpayer revolt in democratic SA

3 Apr 2024

The gazetting of the withdrawal of the declaration of highways in Gauteng as tolled roads marks the end of the first taxpayer revolt in democratic South Africa. In the end, it was the government’s failure to prosecute people who refused to pay that made it fail. There are many lessons for governance here, including how difficult it can be to ensure the rule of law.

The roots of the failure of e-tolls go back to at least 2006. By that date, traffic in Gauteng had increased to the point where the highways between Joburg and Tshwane, and OR Tambo International Airport were often parking lots.

Advocates phoned radio stations saying they had left their homes in Tshwane before 7am, only to be late for a case in Joburg three hours later. At times, it was impossible to move.

This was in an era very different to the present one. Zoom was the sound of someone arriving late for a meeting, while hybrid working was mostly science fiction.

Before SA hosted the Fifa World Cup in 2010, the government acted to deal with the anticipated traffic congestion. The Gautrain was launched and highways in Gauteng were widened, which involved tolling them to pay for the construction of the new lanes.

However, someone in government forgot to ask the residents of Gauteng what they thought of this. There were adverts in newspapers, but no consultation.

This was pointed out to national government officials and the Transport Ministry, but they believed they would be able to force the system on the people of Gauteng.

The people had other ideas.

As we noted 11 years ago, this led to South Africa’s first-ever multiclass movement against a decision by the government. Corporate leaders, like then Avis MD Wayne Duvenage, marched shoulder to shoulder with Cosatu in Gauteng against the e-tolls.

https://www.dailymaverick.co.za/article/2013-10-20-analysis-the-etolls-showdown-this-way-comes/

In 2014, the DA made a large cash donation to the organisation opposing e-tolls, Outa, which was led by Duvenage. It was designed to feed into the election campaign of that year. A comment by the DA leader at the time, Helen Zille, still has immense power.

She said, “People who live in the Western Cape don’t have toll roads, and won’t have toll roads, because they voted for the DA. People in Gauteng will have toll roads because they voted for the ANC.”

Dividing the alliance

Importantly, Cosatu did not drop its opposition to e-tolls or its support for Outa over this. This was a demonstration of what appeared to be an important DA strategy at the time, to divide the alliance of the ANC, the SA Communist Party (SACP) and Cosatu.

The SACP came under intense pressure.

For much of the time that e-tolls were being introduced, the first deputy general secretary of the SACP was Jeremy Cronin, who was also the deputy minister of transport.

As we pointed out at the time, the SACP was largely silent on the issue.

Less silent was the Gauteng ANC. They had been against e-tolls from the start. They knew how big an issue this would be in Gauteng and how badly it would cost them at the polls.

The fact that current Gauteng Premier Panyaza Lesufi was quick to do a broadcast media tour after this weekend’s announcement ending e-tolls shows just how potent an issue this still is.

Soon after the introduction of e-tolls, the other big mistake by the national government became apparent.

It had no mechanism to force people to pay.

There were no physical boundaries to the toll roads, and motorists were asked to pay using e-tags, failing which they faced prosecution for non-payment.

Fancy Sanral shops were opened to deal with the predicted demand for e-tags.

They remained open and customer-free for many years.

Outa promised that it would pay to defend any person charged with not paying their toll fees. Worried about their legal case, the transport department opted not to charge anyone.

The government had only one lever left to enforce e-toll payment — the threat that Gauteng would not renew the vehicle licences of owners with outstanding e-toll debts.

However, that lever too broke after insurance companies promised that expired vehicle licences would not invalidate insurance claims.

E-toll collection rates dwindled, and the only people left paying were car rental companies, government departments and firms run by accountants worried about contingent liabilities.

The lessons

There are many important governance lessons from this.

The first is that in South Africa, consultation is vital. You cannot govern without it. People demand to be heard. If you ignore them, prepare for mass action, protests and a failure to govern.

The second is that if you impose a law, you have to be able to enforce it. If you can’t enforce it, then don’t introduce it.

The government did not heed these lessons.

In 2020, six years after it was clear e-tolling was never going to work, the government made a similar blunder.

It banned the sale of cigarettes, despite being unable to stamp out the illicit tobacco industry.

The result was that the illicit industry grew dramatically, and today, about 70% of all cigarettes sold in South Africa are illegally produced and untaxed. (This must surely contribute to the fact that more than 30,000 people in SA die from smoking-related illnesses every year.)

The third lesson is to know when to stop.

On Tuesday, Lesufi was asked on SAfm about the negotiations with the national government to end the e-tolling system. These talks must have included discussions about who will now pay for the debt which has accrued.

As Lesufi described it, it was a “massive fight. At one stage I felt we might have to pull out of the negotiations. It was difficult, it was uphill, harsh, uncompromising. But we were firm in our resolve that this matter must be finalised as quickly as possible, because it’s affecting the development of our province.”

(Left unsaid was, of course, that it was affecting the ANC’s chances at the upcoming polls. — Ed)

From this comment, it appears the national government was determined to continue with the system, mainly because of the dispute over how to repay the money.

This was madness.

In August 2019, nearly five years ago, it was so obvious that the system was not working that the transport minister at the time, Fikile Mbalula, promised there would be some kind of “solution” by the end of August that year.

It was not the first, and it won’t be the last, promise broken by Mbalula.

This meant that the national government allowed the system to continue failing, knowing it wasn’t working, because of its dispute with the provincial government over the situation it had itself created.

That was the biggest governance lesson the saga provided: to know when you have made a mistake and to admit it.

This is often the hardest thing for governments to do. Long after everyone knows a mistake has been made, governments allow a situation to get worse and the costs to mount up, simply because making the decision to correct it is too hard.

People devoted time, money and resources in the fight against e-tolls. They did this out of democratic principle. Wayne Duvenage and Co deserve their moment of celebration.

However, it will be some time before the question of whether those who govern have learnt from this debacle is answered. DM

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Dividing the alliance

The lessons