The rise of the cost of living

INLSA

A pensioner studies her electricity account, wondering how she can possibly save even a few more cents on the low bill. Picture: PURI DEVJEE

Finance Minister Pravin Gordhan has released his “balanced Budget”, but fuel costs and levies have increased, as have “sin taxes” on cigarettes, beer, wine and alcoholic fruit drinks.

Rising fuel costs will have a knock-on effect on the cost of every item consumers buy, pushing up the cost of living.

Add to that the cost of electricity. The decision by the National Energy Regulator of SA to grant Eskom a tariff increase of 8 percent a year for the next five years means that electricity charges ultimately will more than double.

Compounding the problem, municipalities such as eThekwini will not limit the increase to the 8 percent granted to Eskom but have already said that once they have done their calculations, they will look at a higher figure.

According to Craig Adams, the deputy general secretary of the Independent Municipal and Allied Trade Union, electricity at the minimal 8 percent increase will rise from 61c a kilowatt-hour in 2012/13 to 128c/kWh in 2017/18.

The union is just one of the many organisations to have condemned the increase.

Faced with soaring costs on all sides, people will have to tighten their belts.

To get some perspective on the impact on people, the Sunday Tribune spoke to a range of consumers.

Charlotte Wilson said she had listened with bated breath to Gordhan’s Budget speech on Wednesday, to hear how much her state social pension would amount to from April.

Little as it is, she was thankful for the R60 increase, because it could mean the difference between going hungry towards the end of the month or not.

Wilson cannot afford to run a car. Even so, she knows that every time fuel costs go up, the items in her food basket also increase.

Given the Road Accident Fund levy of 8c and the fuel levy increase of 22.5c from April, even harder times are ahead for her.

The one thing she does not have to worry about is the increase in sin taxes. For years, she has not had a drink or smoked a cigarette. Such luxuries have long been out of her reach.

The rise in electricity has her desperate, as she has already trimmed the fat to the bone. Her monthly electricity account is already under R100; yet somehow she will need to save more units to keep it that low.

On her monthly budget, all expenses are worked out to the last cent. Her geyser is often switched off; she is prepared to use lukewarm water; she switches her lights on only when it is really dark; she uses the overhead fan only when the heat becomes unbearable; she has a tiny desk-top fridge; and she has even sold her toaster.

Her one luxury is a small television set, which she uses at night only, “for company”, because she lives alone.

“I really cannot think of any way that I can save further on electricity,” said Wilson.

“I survive because I own a small flat (which she bought years ago out of a small inheritance from her father) and my levy is just under R600 a month.”

While her husband was alive, life was easier, but now she has to make do on the R600 over from her pension (in 2011/12 she received R1 200).

With this meagre amount, she has to cover medical costs (she has no medical aid); food; bus fare (she mostly walks); and electricity.

On average she spends less than R400 a month on food.

Mary Muthwa had to take early retirement due to ill-health. Now 59, she has three grandchildren.

Her two daughters, who work in Joburg, pay the school fees for an autistic child in a special school and a girl in Grade 6. They also send her money to support a two-year-old she is looking after at home.

“I use metered taxis or mini-bus taxis, as I do not drive,” said Muthwa.

She is concerned that the rising costs of fuel will mean that she will have to fork out more in fares.

Hectic

Fortunately, the bond on her flat in Glenwood has been paid off and she only has to meet a levy of R1 100. Her major concern, though, is the soaring cost of electricity

Her bill sounds ludicrous. According to Muthwa, it used to be about R500 or R600 a month, but it recently rose to R2 800 a month.

“It is hectic. There has to be something wrong. I have asked the municipality to look at the meter, but so far nothing has happened,” she said.

In an effort to keep her electricity costs down, she does not cook every day.

“I only iron the grandchildren’s school clothes,” she said. “Otherwise I take the washing off the line, and fold it neatly, to save on electricity.”

According to her, neighbours had also complained about their accounts. “One got a bill for R3 500 last month,” she said. Muthwa does not smoke or drink.

Even the more comfortably off say they are going to have to look at their lifestyle, cutting back on luxuries.

Some, though, are more fortunate.

Portia Nodangala, a single mother in a high-powered position, is not overly concerned about the latest budgetary announcements.

She has a child at a private boarding school in Mooi River. Every six weeks the school bus drops him off at the Pavilion shopping centre, where she fetches him, so she only has to make the journey to the Midlands at the beginning and end of terms.

This is when she will notice the increase in the costs of filling her car tank.

She spends about R600 every two weeks on fuel to work, church, the shopping mall, and visiting friends.

“I don’t smoke, and only have a glass of wine, so the sin taxes won’t affect me.

“As I live alone, my electricity bill is about R500 a month. I switch off the geyser when I go to bed at night, and only switch it on the next evening, when I return from work. Sometimes I don’t even cook. It’s just the TV and fridge,” said Nodangala.

“Working for a financial institution, I am well versed in managing a budget,” she said. She is aware, though, that many must be battling to survive - and things can only get worse for them. - Sunday Tribune

Click here for IOL’s full coverage of the Budget