Traffic fines a boon for struggling towns

People driving through Laingsburg should slow down. The tiny central Karoo town is easily SA’s most zealous issuer of traffic fines. It levies the equivalent of R2,613 for each of its 8,900 residents, a Business Day analysis of data collated by the Treasury for the 2015-16 fiscal year shows.

The bulk of fines are dished out to motorists passing through on the N1 highway and while barely a fifth of them are collected they nevertheless play a vital role in shoring up the municipality’s finances.

“To us it’s a very important source of revenue. We won’t be able to survive without it,” says Laingsburg municipal manager Stephanus Pieterse. “We have a positive bank balance but the alarm light has been flickering. The prospects don’t look good for the next three years as revenue is limited and we have no cash reserves.”

Most of Laingsburg’s residents are unemployed, its tax base is extremely small and the municipality collects only about 65% of the amount it bills for electricity, water and other services, says Pieterse. Traffic fines account for 15% of the municipal budget, making them the third- or fourth-biggest source of revenue.

Mthonjaneni in KwaZuluNatal, ranks a distant second on issuing fines — it levied R24.3m worth, or R488 per capita in the period under review.

While the town has beefed up its law enforcement, it has adequate revenue and doesn’t see income generation as its primary motivation for penalising errant motorists, according to municipal manager Philane Sibiya.

“It’s about ensuring people in our town are safe,” he says.

Mike Schussler, chief economist at Johannesburgbased research group Economists.co.za, warns that overenthusiastic fining by municipalities can have a negative knock-on effect on the economy. He cites the example of freight trucks being penalised for minor transgressions, which push up the cost of transporting goods and ultimately prices for consumers.

“These towns should be generating money from motorists in other ways, enticing consumers to part with their money. I would rather see national government pay these small municipalities grants. Fines shouldn’t be seen as a major revenue generator.”

The data from the Treasury’s section 71 reports shows that the large metros tend to issue fewer fines per capita than the obvious outliers like Laingsburg and Mthonjaneni, even though the quantum is larger.

Nevertheless, they still issue a fair amount relative to the size of their population.

Johannesburg, for example, invoiced fines totalling R869.3m for the year to June 2016, which equates to R175 for each of its 4.94-million residents, while Cape Town levied R670m worth, or R167 per capita.

Only a quarter (27%) of the fines issued by the City of Cape Town are paid by errant motorists, but just 19.6% of the value of the fines is actually recovered, due to nonpayment and reductions authorised by prosecutors and the courts, according to Cape Town mayoral committee member for safety and security Jean Pierre Smith.

“Traffic income has improved in recent years as a result of numerous initiatives like the introduction of an SMS reminder service and ramping up Operation Reclaim, which tracks down warrant evaders. But it is a fairly insignificant amount when compared to the greater budget,” he says.

The vast majority of the municipalities issued fines totalling less than R100 a head: Ventersdorp issued just R18 per capita, while in Oudtshoorn the figure was a mere R18 as well.

Automobile Association spokesman Layton Beard says towns that throw the book at errant motorists to try to raise revenue corrupt the intention of road traffic legislation and will undermine compliance.

“People don’t want to be seen as a cash cow for a municipality,” he says.

“Any municipality that begins its collection of traffic fines on the basis of revenue collection is, in our opinion, not acting ethically and not acting in the interests of road safety. With the death toll on roads having reached a decade-high of 14,000 in 2016, it’s clear that the system of trying to keep motorists in check isn’t working,” Beard says. / Go to www.businesslive.co.za for more details on municipal traffic fines (and the places to avoid).