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Johannesburg - Gauteng's proposed toll fees will have a disproportionally large impact on the poor, a report released on Tuesday shows.
"Though the total consumer price inflation impact will only be around 0.4%, the impact on the poor will be much larger - as the toll fees will effect disproportionately large increases in a number of items consumed by the poorest consumers," according to the report prepared by economist Mike Schussler.
The report looked at specific cost increases in prices of three everyday items - a litre of milk, a loaf of bread and a litre of petrol.
The toll fees are also equal to an increase of 2% in the personal income taxes of Gauteng residents, said Schussler.
"This does not include the consumer price effect as toll fees are not part of the current inflation basket," he added.
He recommended that the government establish a transport regulating authority in order to oversee and regulate toll tariffs in the country.
"The item to experience the largest cost increase is a cheap loaf of bread, the price of which will increase by 2%," the report read.
The report was commissioned by the Road Freight Association and AfriForum, to present to the Gauteng Freeway Improvement Project (GFIP) e-toll steering committee which is looking into the price of toll fees.
The report assumes that transport firms, which have relatively low profit margins, will pass all their increasing costs to consumers.
This could lead to a 0.1% increase in a litre of petrol and a 0.9% increase in a litre of milk.
"The high weighting of transport costs in total costs is likely to be seen in other staple food products, such as maize meal, which are bulky and of low value.
"The impact on the cost of food is therefore likely to be largest in the simplest and cheapest foodstuffs."
These foods comprise a proportionately larger part of poor households' consumption compared to other income groups.
"Inflation weights based on spending patterns in 2008 indicate that, for the poorest 20% of South African households, more than 39% of the household budget is expended on food, whereas the richest 20% of South Africans spend only about 11% on food," according to the report.
The Gauteng toll fees were set at 66 cents per kilometre before a public outcry led to them being put on hold and a committee formed to reassess the pricing.
The tolls form part of the GFIP, which includes widening roads, easing congestion at bottlenecks and improving lighting.
"Though the total consumer price inflation impact will only be around 0.4%, the impact on the poor will be much larger - as the toll fees will effect disproportionately large increases in a number of items consumed by the poorest consumers," according to the report prepared by economist Mike Schussler.
The report looked at specific cost increases in prices of three everyday items - a litre of milk, a loaf of bread and a litre of petrol.
The toll fees are also equal to an increase of 2% in the personal income taxes of Gauteng residents, said Schussler.
"This does not include the consumer price effect as toll fees are not part of the current inflation basket," he added.
He recommended that the government establish a transport regulating authority in order to oversee and regulate toll tariffs in the country.
"The item to experience the largest cost increase is a cheap loaf of bread, the price of which will increase by 2%," the report read.
The report was commissioned by the Road Freight Association and AfriForum, to present to the Gauteng Freeway Improvement Project (GFIP) e-toll steering committee which is looking into the price of toll fees.
The report assumes that transport firms, which have relatively low profit margins, will pass all their increasing costs to consumers.
This could lead to a 0.1% increase in a litre of petrol and a 0.9% increase in a litre of milk.
"The high weighting of transport costs in total costs is likely to be seen in other staple food products, such as maize meal, which are bulky and of low value.
"The impact on the cost of food is therefore likely to be largest in the simplest and cheapest foodstuffs."
These foods comprise a proportionately larger part of poor households' consumption compared to other income groups.
"Inflation weights based on spending patterns in 2008 indicate that, for the poorest 20% of South African households, more than 39% of the household budget is expended on food, whereas the richest 20% of South Africans spend only about 11% on food," according to the report.
The Gauteng toll fees were set at 66 cents per kilometre before a public outcry led to them being put on hold and a committee formed to reassess the pricing.
The tolls form part of the GFIP, which includes widening roads, easing congestion at bottlenecks and improving lighting.
