Finance Minister Enoch Godongwana has defended the decision to increase the price threshold for official vehicles for members of the executive from R800,000 to R1.1 million, citing numerous submissions and complaints that the previous limit was no longer suitable.
Godongwana said the National Treasury received feedback that the R800,000 price limit was no longer viable due to inflationary adjustments over the past five years, which had eroded the value of the threshold. He explained that the price threshold was revised to R1.1 million to allow departments to procure vehicles that are fit and proper for official duties.
Background to the Decision
The decision to increase the vehicle price limit was made in the context of current budget constraints, with Godongwana stating that the annual adjustments had not been conducted since 2020 due to fiscal consolidations. The last adjustment was made during the 2019 Medium-Term Budget Policy Statement, according to the National Treasury website.
Godongwana clarified that the price threshold was not a target price, and departments are allowed and encouraged to use their own discretion to procure vehicles for official use that cost less than the price threshold if such vehicles are available.
Reaction to the Decision
The decision to increase the vehicle price limit has been met with criticism from some quarters, with Build One South Africa (BOSA) spokesperson Roger Solomons stating that it is offensive to millions of South Africans who face a cost-of-living bind and are reeling from a R3 per litre fuel price increase.
Solomons argued that the decision gives political elites a blank cheque to be driven around in luxury vehicles while citizens count every kilometre and every rand just to get by. He also questioned the lack of transparency around the total annual cost of official vehicle benefits and related benefits.
Godongwana stated that the purchase of vehicles is a decentralised function at the national and provincial spheres of government, and departments are required to record details of all acquisitions and disposals of vehicles, as well as the costs of vehicles for official use by members of the executive, in their annual reports.
- The R1.1 million price threshold is not a target price, but rather a maximum limit.
- Departments are encouraged to procure vehicles that cost less than the price threshold if available.
- The decision to increase the vehicle price limit was made in the context of current budget constraints.
For more information on the Medium-Term Budget Policy Statement, visit the Government of South Africa website.
