Cosatu weighs in on sugar tax

COSATU presented its submissions on the Treasury’s proposed tax on sugar-sweetened beverages (SSB) to the National Assembly’s portfolio committees on finance and health’s public hearings in Parliament yesterday.

Cosatu agreed with the government that the overconsumption of SSB is a national health crisis, but it is equally worried about the economic impact the proposed tax might have and that it is likely to result in thousands of job losses.

A presentation by the South African Institute of Chartered Accountants (SAICA) presented by Pieter Faber and Madelein Grobler on the effectiveness of behavioural taxes said that the purpose of tax on SSB is “to address obesity by changing consumers’ behaviour to consume sugar-sweetened beverages”.

They added that “it is not to collect revenue to compensate or fund antiobesity or health projects.”

A document by Cosatu said: “We agree with government that we need to act and the sooner, the better. Reducing our consumption levels of sugar will save lives and reduce health expenditure.”

However, Cosatu is deeply concerned about the effect the tax will have on jobs, “Treasury estimates it will cause 5 000 job losses.”

Cosatu parliamentary co-ordinator Matthew Parks said: “We hope they (Parliament) will go a long way towards achieving a win-win consensus approach to this critical matter.

“Our concern is based upon an unemployment level of 36%, jobless growth, thousands of workers losing their jobs month after month and government’s inability to create jobs.”

Cosatu sees the fact that the SSB tax is being run by the Treasury with the Department of Health in a supporting role as a further warning sign that the tax has not been well planned.

“It’s shocking that government can go into great detail about how to raise billions of rand through the SSB tax, yet it cannot produce a plan to save 5 000 farmworkers jobs.”