Mar 21, 2025 Tyre Equipment, Parts Association (TEPA), Dylan Petzer
TEPA’s take on SA’s 2025 fiscal roadmap
Opinion piece by Dylan Petzer, National & Central Vice-Chairperson, Tyre Equipment and Parts Association (TEPA).
With Parliament yet to approve the 2025 Budget, the Tyre, Equipment & Parts Association (TEPA) weighs in on the draft fiscal framework’s implications for the sector. While Finance Minister Enoch Godongwana’s proposed R1 trillion infrastructure spend and VAT hike loom large, TEPA cautions that parliamentary debates and coalition pressures could reshape key allocations. This opinion piece dissects the draft budget’s risks and opportunities, urging policymakers to prioritise procurement reform and growth-centric adjustments before final ratification. The clock is ticking – South Africa’s logistics crisis won’t wait for bureaucratic gridlock.
Finance Minister Enoch Godongwana’s 2025 Budget Speech – still subject to parliamentary deliberation – offers a tentative roadmap for our sector. But as legislators debate its fine print, TEPA members face urgent questions: Will promised infrastructure billions survive coalition compromises? Can VAT hikes be softened through pro-growth amendments? Here’s our provisional analysis of the possible potholes and pathways ahead.
Infrastructure: A Conditional Lifeline
The headline R1 trillion infrastructure pledge – including R402 billion for transport – could ignite demand for tyres and equipment if Parliament preserves these allocations. SANRAL’s proposed R100 billion for roads and PRASA’s rail revival (10-minute Mamelodi/Khayelitsha trains) are tantalising, but our members recall too many ghost projects from past budgets. The Treasury’s “live audit” proposal for megaprojects shows awareness of leaky pipelines, yet until Parliament codifies procurement reforms, these remain hopeful bullet points, not binding solutions.
Tax Turbulence Ahead?
The proposed VAT hike to 16% by 2026/27 – already drawing opposition backbench fire – risks stalling vehicle and aftermarket spending. While expanded zero-rated items offer minimal relief, SMEs face a perilous equation: stagnant 1.8% GDP growth projections + higher consumer taxes = deferred maintenance cycles. We would suggest parliament debate offsetting measures, like accelerated depreciation for fleet upgrades or VAT exemptions on retread tyres. Without adjustments, this fiscal measure risks placing excessive strain on an already fragile economy.
PPPs: Promise vs. Parliamentary Reality
Revised PPP regulations (effective June 2025 if passed) could unlock private-sector partnerships in rail and ports. Transnet’s proposed container hub and Trans-Caledon’s energy credit guarantees are conceptually sound, but legislative delays have derailed bigger and better plans in the past. Parliament must resist watering down PPP safeguards – our sector needs transparent tenders.
Governance Reforms: Will Parliament Walk the Talk?
The draft budget’s focus on axing “ghost workers” and rationalising public wages addresses symptoms, not causes, of state bloat. Unless Parliament mandates strict procurement timelines (90-day payment clauses, quarterly tender reporting), infra-structure intended funds will keep evaporating in bureaucratic limbo. TEPA welcomes cross-party calls to ringfence infrastructure budgets.
Social Spending vs. Growth: A Looming Trade-Off
While expanded grants and wage hikes dominate parliamentary debates, economists warn against robbing Peter’s pothole fund to pay Paul’s public sector. The R22 billion health sector bailout highlights a potentially dangerous pattern: consumption budgets crowding out capital investment. Legislators must scrutinise whether social spending amendments undermine the very infrastructure that creates jobs and mobility for grant recipients.
Conclusion: Steering Through the Storm
This draft budget is not an endpoint but a catalyst for decisive legislative action. Parliament must first and foremost lock infrastructure funding into law through statutory appropriation clauses, to ensure the R1 trillion pledge reaches its transformative potential. Equally critical is tying the proposed VAT hike to tangible SME relief measures such as accelerated depreciation for fleet upgrades or VAT exemptions on retreads to prevent consumer spending from skidding further. Third, fast-tracking PPP regulations demands more than procedural tweaks; it requires embedding industry consultation into the amendment process to avoid repeating the delays that have stranded past reforms. Finally, legislating strict procurement timeframes - 90-day payment terms, quarterly tender disclosures - would inject accountability into a system paralysed by bureaucratic inertia. These fixes aren’t abstract ideals; they’re urgent repairs for an economy running on fiscal spare tyres. As debates unfold in committee rooms, lawmakers must remember: South Africa’s infrastructure emergency won’t pause for parliamentary procedure. The time for amendments is now because when the rubber meets the road, even the most carefully drafted budget can’t outrun political inaction.
Jul 09, 2025 0
Jul 08, 2025 0
Jul 07, 2025 0
Jul 04, 2025 0