SUGAR TAX WILL COST JOBS – COSATU

CityPress - - Business - PETER LUHANGA busi­ness@city­press.co.za

Labour fed­er­a­tion Cosatu has ex­pressed con­cern that the pro­posed tax on sug­ar­sweet­ened bev­er­ages may lead to the loss of thou­sands of jobs in the sugar in­dus­try.

Mak­ing a sub­mis­sion this week on the pro­posed tax at a pub­lic hear­ing hosted by Par­lia­ment’s com­mit­tees on fi­nance and health, Cosatu’s par­lia­men­tary li­ai­son of­fi­cer, Matthew Parks, said the trade union feared the ef­fect that the sugar tax – pro­posed to be­gin on April 1 – would have on jobs.

Cosatu is South Africa’s largest trade union, boast­ing more than 2 mil­lion work­ers, and is part of the tri­par­tite al­liance with the ANC and the SA Com­mu­nist Party.

Parks com­pared Trea­sury’s es­ti­mate of 5 000 job losses to the fig­ure mooted by the SA Cane Grow­ers’ As­so­ci­a­tion – a 5 817 job loss – adding that the sugar in­dus­try em­ployed 79 000 work­ers on 22 300 farms.

The cane grow­ers’ as­so­ci­a­tion fur­ther es­ti­mates that the sugar tax will re­duce farm in­comes by be­tween 15% and 30%. It goes on to ques­tion the af­ford­abil­ity of the pro­posed tax at a time when one out of two farms are heav­ily in­debted and one out of three emerg­ing farms fail.

Parks said about 15 000 jobs in the sugar sec­tor had been lost be­cause of lower global prices.

He added that 2016 saw 52 000 job losses in the min­ing sec­tor, 10 000 in the re­tail sec­tor and 1 000 in the bank­ing sec­tor. Va­can­cies in the pub­lic ser­vice and at uni­ver­si­ties had been frozen, and thou­sands of posts at Telkom and the SA Post Of­fice out­sourced.

He made ref­er­ence to last month’s 1 350 job losses in the poul­try sec­tor and the lay­ing off thou­sands farm work­ers over the past 20 years.

Parks said all this was against the back­ground of the re­duced min­ing sec­tor work­force from more than a mil­lion 20 years ago to cur­rent es­ti­mates of 400 000.

In ad­di­tion, he said, 100 000 jobs were lost in the tex­tile in­dus­try in the 1990s when gov­ern­ment lifted tar­iffs “too quickly”, and the num­ber of Telkom staff had shrunk from 50 000 to 5 000.

“Through­out all these mas­sive job losses, gov­ern­ment has shown it­self to be un­will­ing or un­able to pro­tect jobs, to in­ter­vene timeously to save jobs or even to cre­ate jobs,” said Parks. He added that an es­ti­mated 79 000 work­ers were em­ployed in the sugar in­dus­try, par­tic­u­larly on sugar farms and mills in KwaZu­luNatal and Mpumalanga.

“Gov­ern­ment does not ap­pear to have any plan to pre­vent its es­ti­mated 5 000 jobs losses,” he said.

“The si­lence of Trea­sury and the depart­ment of health on this mat­ter in­di­cate that they view such job losses for those fam­i­lies’ bread­win­ners as nec­es­sary col­lat­eral dam­age,” he said.

He said Trea­sury needed to be care­ful about over­tax­ing an al­ready heav­ily taxed and poor na­tion.

Healthy Liv­ing Al­liance, an al­liance com­pris­ing 10 health and so­cial jus­tice or­gan­i­sa­tions, sup­ported the pro­posed sugar tax.

Its rep­re­sen­ta­tive, Tracey Malawana sub­mit­ted that taxes on sug­ary drinks were par­tic­u­larly ef­fec­tive in re­duc­ing con­sump­tion and im­prov­ing health among lower-in­come con­sumers, who were re­spon­sive to price in­creases and suf­fered dis­pro­por­tion­ately from the ill ef­fects of obe­sity.

Pro­fes­sor Corné van Wal­beek, the prin­ci­pal in­ves­ti­ga­tor in the Eco­nom­ics of To­bacco Con­trol Project at Univer­sity of Cape Town, said pub­lic health con­cerns drove the de­ci­sion to raise the ex­cise tax on to­bacco prod­ucts in the 1990s and that, thanks to these tax changes – more than any other to­bacco con­trol in­ter­ven­tions – a dra­matic re­duc­tion in smok­ing had oc­curred.

He was dis­mis­sive of pre­dic­tions that up to 60 000 jobs might be lost be­cause of the sugar tax, say­ing par­ties in­volved in the to­bacco in­dus­try made sim­i­lar alarmist claims in the late 1990s, when gov­ern­ment an­nounced that it would in­crease ex­cise tax on cig­a­rette tax to 50% of its re­tail price. De­spite scare tac­tics, leg­is­la­tion was passed and as a re­sult, the pop­u­la­tion had ben­e­fited from smoke-free places and not be­ing bom­barded by to­bacco ad­ver­tis­ing.

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