How parties intend to mitigate rising costs

With the cost of living being one of the biggest problems confronting South Africans ahead of elections, some of the major political parties have outlined how they intend to mitigate the effects of this on consumers.

According to parties surveyed by Sowetan, some of the factors behind the high living costs in SA are driven by food, transport and basic services, exacerbated by inadequate state functions and high debt burdens.

Addressing these issues requires comprehensive policies and investments in sectors like mining, agriculture and energy to boost the economy and create sustainable development, they said.

ActionSA’s  Pieter Scribante said the main reasons for SA’s high cost of living were high inflation, weak wage growth and a poor economy.  

“Consequently, with inflation outpacing wage growth, in real terms, the average worker’s salary is worth less each year,” he said. 

Scribante said the country’s weak economic performance was a vital driver of the worsening cost of living in SA. 

“SA’s weak economic performance is from 2014-2023. Economic growth averaged a meagre 0.76% a year, much lower than our population growth rate of 1.15% during the same period. This means the average South African is poorer in 2024 than in 2014,” said Scribante. 

He said the best chance of elevating the country’s cost-of-living problems was increasing the economy, creating more jobs and protecting the most vulnerable citizens. 

DA spokesperson Solly Malatsi said the ANC’s economic policy was one of the major factors contributing to the high cost of living. 

“Particularly stuff like the increasing price of electricity, the increasing price of fuel and also just the levels of corruption. All in all, these things play an effect on the high cost of living that we are experiencing. One of the things that the DA has proposed to reduce the cost of living is making sure we do not introduce new taxes,” he said. 

Malatsi said with taxpayers already overburdened with overtax, they didn’t want to impose more on them. “We are also proposing that we need to expand food items that are or are exempted from value-added tax.

"This includes stuff like flour, margarine, butter and chicken because a lot of families rely on those as a source of their meals. So by exempting these foods from value-added tax, it will be able to ensure that you know at least basic essentials is not as unaffordable,” said Malatsi. 

Malatsi’s words were echoed by Build One South Africa's (Bosa), Graham Charters, whose party also wants to expand the list of zero-rated food items that are untaxed “because with VAT likely to increase, this is a vital intervention for poor households that spend a disproportionate amount of income on food”.

He also said they would scrap numerous fuel levies, which make up a third of the total cost of a litre of petrol.

“This has a direct impact on lowering citizens’ transport costs as well as an indirect impact on lowering the cost of food. He also said they would also be freezing the 31.4% electricity price increase scheduled for the medium term. 

“Again, this is an out-of-touch and unaffordable increase for already squeezed households. Ultimately, the best remedy to address struggling households is to put more jobs in homes. With an estimated 18-million households averaging 3.3 persons per household, to put a job in every home – at a minimum – will require at least 2 million new jobs, said Charter.

Rise Msanzi’s Gugu Ndima said if SA had a functioning state, certain things which are primarily privatised would not drive-up costs.   

“The cost of not having access to water and sanitation for example impacts on the functioning of the economy and compels people to incur further cost to access to water. This also drives away investment in any local economy. You cannot have a functioning economy without a functioning state,” said Ndima. 

Ndima said they recently launched a plan for a new economy in Kliptown, Soweto, proposing a three-year wealth tax to establish a National Growth Fund. 

“This would be legislated like the Reconstruction and Development Programme. The capital raised through this would be directed towards rehabilitation of infrastructure in the economy and reviving anchor industries such as mining, agriculture and tourism.  

“Bread can easily be one of the ways in which we create jobs and small businesses in our communities. However, this becomes challenging if price cartels continue monopolising the market. Get more locally owned, government-empowered bakeries to access the market,” said Ndima. 

Steve Motale of the Patriotic Alliance said addressing the factors of cost of living requires a comprehensive approach involving government policies, “economic reforms, social programmes and private sector initiatives to ensure the cost of living remains manageable for everyone in the population".

“There is no silver bullet for this,” he said, adding that removing barriers, cutting red tape and enforcing antitrust laws can prevent monopolies and lower consumer prices. 

“SA truly doesn’t have enough SMMEs, and this is also a drag on employment. Improving the quality, accessibility and affordability of education and healthcare services can also help reduce long-term costs for individuals and families. 

“Implementing policies to promote job creation, increase wages, improve working conditions and enhance labour market flexibility is also likely to boost household incomes and reduce financial strain on families,” said Motale. 

Sowetan reached out to the ANC and EFF too but their representatives never responded.