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Following the release of the Carbon Tax Policy Paper today, the DA will oppose any tax increases over the three-year budget cycle and until South Africa’s economic growth recovers.

The reality is that the introduction of a carbon tax together with Eskom’s effective monopoly on electricity generation will simply result in the costs of any such tax being passed on to ordinary South African consumers who are forced to purchase energy from Eskom. To this end, National Treasury should prioritise opening up the electricity grid and the promotion of independent power producers in the renewable energy sector.

The Policy Paper on the proposed Carbon Tax, first announced by Minister Pravin Gordhan during his 2012 budget speech, outlines details on the proposed tax to be imposed on taxpayers based on emissions derived from emission factors linked to fuel inputs used, at varying rates to be phased in from 1 January 2015.

The IMF has revised our growth forecast down to 2,8% for 2013, half the rate of growth forecast for the rest of sub-Saharan Africa. South Africa should not even consider introducing a carbon tax, or any new tax, until our economic growth recovers from the current low levels.

The DA remains fully committed to the goals of building a low carbon ‘green’ economy in South Africa and recognises that our current greenhouse gas emissions are far too high. National Treasury should develop positive rather than punitive incentives to promote investment in cleaner, energy efficient technology across the economy.

National Treasury should be focused on implementing its proposals to subsidise jobs for young people, bringing down administered prices and cutting red-tape for small businesses instead of coming up with new taxes to impose on the South African economy, regardless of how well-intentioned they are.

Growing the economy and creating jobs remains the DA’s first priority. Increasing taxes at this time is not the way in which we will achieve this.