VAT FREE Chicken

INSIDE LABOUR: We did not steal the billions, so why should we have to pay?

We did not steal the billions, so why should we have to pay?

That is the attitude of many trade unionists, especially in the public sector, as the government tries desperately to establish its ‘Thuma mina’ social compact.

And it is also becoming increasingly clear that organised labour and others are no longer prepared to be fobbed off by commissions of inquiry, panels and task forces established as proclaimed means to remedy whatever problems need to be dealt with.

A plethora of such bodies already exist or have existed, with little positive to show for the effort. Take, as an example, the task team established to report “by July” on the damaging social and economic effects of the dumping of imported poultry onto the domestic market. If it has reported, neither I, the industry nor the unions involved are aware of the fact.

Yet, back in March, Katishi Masemola, general secretary of the Food and Allied Workers’ Union (Fawu) protested that the government’s approach to the poultry industry was “creating havoc”. With the support of FairPlay, Fawu also staged a march on the European Union offices to protest dumping.

The Department of Trade and Industry (DTI) admits that the poultry industry contributes more than 16% to the gross domestic product (GDP) of the country, and generates more than 100 000 jobs throughout its value chain and related industries.

But rather than support the industry, the policies of the DTI are undermining it.

Effective dumping

Even the AGOA (Africa Growth and Opportunities Act) deal, much lauded by the DTI and minister Rob Davies, provides for the effective dumping (free of anti-dumping tariff) of up to 65 000 tons of chicken from the United States — and this is expected to grow.

Of course, the deal also allows South African manufacturers to export duty-free to the US. Ironically, perhaps, the garment industry, almost annihilated by cut-price Asian imports, benefits here.

As a result, there is a widespread view that – with the complicity of government – importers, wholesalers and retailers are profiting, but at the expense of local production. And the loss of domestic production spells the loss of jobs, of family income and the further impoverishment of the majority.

This happened in recent years in Venezuela where, flush with petrodollars, the late President Hugo Chavez imported massive quantities of subsidised food. It increased his popularity but, in the process, almost destroyed domestic agriculture.

The lesson is simple: cheap food may win votes in the short term, but the destruction of domestic production spells disaster.

Similar path

South Africa seems to be treading a similar path, and not only in relation to poultry. With much of the manufacturing sector clearly in trouble, sugar is another — highly competitive — agribusiness that government accepts is being unfairly dumped upon.

As late as June 25, when irate sugar planters in KwaZulu-Natal marched in protest about the import of cut-priced — “dumped” — sugar, Lionel October, director-general of the department of trade and industry, admitted to the protestors: “Lots of sugar has come into the country and the industry is bleeding.”

It was the very point the protestors were making.

But nothing has been done. “These things take time,” a DTI official said, pointing out that there were “many complications”.

Yet, while the details of various trade agreements are often complicated, the underlying facts are usually quite straightforward and, on purely domestic issues, there should be no complications.

A broader view

Take, for example, the again highlighted issue of sanitary products for schoolgirls. A “panel” was set up to look into the removal of value added tax (VAT) from sanitary products and has still not been heard from.

However, both before, and in line with the Mandela 100 celebrations, voluntary organisations have ensured that thousands of girls do not miss school because of the lack of something so essential. And 15% of all the money raised continues to go into government coffers, courtesy of VAT.

Trying to justify not extending the number of products to be zero-rated for VAT — and in support of the latest fuel price rise — government supporters tend to ask: “But where will government get the money it needs?”

This, coming in the wake of the announcement that there was R19bn of “irregular expenditure” at Eskom, encourages not just cynicism, but anger.

The major focus for this will probably be the backlash against fuel price increases. It promises to trigger one of the biggest protests of recent times. Hopefully, it will not be seen in isolation; a broader view will prevail.

Government should perhaps be reminded that, as FairPlay has pointed out, dumping from the European Union resulted in Senegal at one stage losing 70% of its broiler chicken production. And it was only after 120 000 jobs were lost in the Cameroon that the government there finally took steps to halt the annihilation of the local poultry industry.

Jul 27 2018 06:00 Terry Bell