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On a tight Budget 2016

The National Budget 2016 tabled on 24 February in Parliament impacts both positively and negatively on the Transport Industry. Minister of Finance, Pravin Gordhan, was at pains to deliver a balanced Budget 2016 to a very diverse South African stakeholder group.

Snapshot of the impact of Budget 2016 on the Transport Industry


It is clear that the Minister had a tough job at delivering a Budget 2016 which attempts to satisfy as many as possible – including Business and Industry including the Transport Industry, Private Capital, taxpayers and the public at large.

TRUCKS & Heavy Equipment reviews the impact on the Transport Industry.

Business confidence remains moot, as it is still uncertain how ratings agencies will grade South Africa come mid-2016. Local and international investors may or may not be influenced by Budget 2016.

The country’s overall GDP forecast for 2016 has been revised from 1,7% growth down to a paltry 0,9%. This GDP forecast had an immediate effect on the ZAR as the value of the Rand dropped 3% in daily trade.

Budget 2016, on the positive side

The Greater urgency to implement Government’s National Development Plan 2030 (NDP) which can create Transport Industry opportunities aligned to improving public service delivery nationally, provincially and locally.

Government spending programmes, which have a positive Transport Industry spin-off:

  • R30,3 billion towards improving national non-toll roads
  • R171,3 billion (plus local government contribution) towards expansion in providing basic services to poor households
  • R108,3 for public housing
  • R102 billion towards water resource, sanitation and bulk infrastructure
  • R38,3 billion towards basic education infrastructure
  • R10,2 billion towards manufacturing development incentives
  • R4,5 billion towards pilot districts for the National Health Initiative (NHI)

Bus-Travel-2 Budget 2016

Government promises to refocus on certain ‘areas for improvement’, which might have a positive impact Transport Industry spin-off:

  • Focus on expanding the Bus Rapid Transport (BRT) system across more metropoles
  • Some drought relief funds allocated to the agricultural sector, as well as loans to this sector to be granted through the Land Bank
  • Greater transparency ‘measures’ to be implemented in the Government tender process
  • Greater policy clarification
  • Improving regulatory certainty and implementation
  • Improving security of energy supply (Eskom)
  • Focus on renewable energy sources
  • Small enterprise development

Budget 2016, on the down side

A number of measures from the Budget 2016 tabled have direct and indirect impact on the Transport Industry.

  • General fuel levy to go up by 30c per litre
  • Tyre levy, effective from 1 October 2016, going towards recycling programmes
  • CO2 motor vehicle emissions tax will go up
  • Carbon Tax [insufficient data given in Budget 2016 to assess impact]
  • Number of municipalities reduced from 278 to 257
  • [e-Tolls not addressed]


While this is but a quick snapshot of Budget 2016, TRUCKS & Heavy Equipment also takes a sanguine view on future action and implementation by Government mooted in the Budget 2016 tabled.

We will wait and see what transpires, but hold a positive view that change for the better will assist Government in its attempts to reach a higher GDP and reduced the country’s fiscal deficit over the next three years.

Photo credit:

Tristan Wiggill
Special Features Editor at Business Fleet Africa