The new black-only government fund for businesses in tourism is harmful and runs contrary to the public interest. It is morally and economically unacceptable that the state is forcing businesses to base their business decisions on racial classification even in times of crisis. This, according to a statement by Piet le Roux, CEO of the business group Sakeliga, after the launch of the Tourism Equity Fund on Tuesday by President Cyril Ramaphosa.
“When it comes to collecting taxes, everyone is good enough for the government. Even the most disastrous Covid-19 regulations are not bound to racial prescriptions. But when aid and relief is concerned, the government openly categorises business people on the basis of race. This tourism fund is an unacceptable escalation of a failed, divisive and doomed political programme. It elevates the race of a few business owners above the interests of employees, consumers, and suppliers of all races. We see here the short-term enrichment of a few politically connected people, at the expense of public prosperity, employee and consumer interests, human dignity, and the independence of business people,” says Le Roux.
Le Roux says the personal stamp of approval that President Cyril Ramaphosa places on the race-based tourism fund with his remarks at its launch provides for aggravating circumstances: “As chairman of the Black Economic Empowerment Commission twenty years ago, President Cyril Ramaphosa was instrumental for the development of BEE. However, even if it were conceived with the best of intentions, after two decades it is now clear and widely recognized that BEE is harmful. That government now, in times of crisis, doubles down on this policy rather than reform is unwise and unworthy.
Sakeliga similarly expressed concerns last year over Tourism Minister Mmamoloko Kubayi-Ngubane’s announcement that BEE shall play a role in awards from the Covid-19 SMME tourism relief fund. The new Tourism Equity Fund (TEF), announced Tuesday as a joint endeavour between the Department of Tourism and Small Business Development, is apparently funded by a combination of about R1.2 billion in tax money and loans. To qualify for loans or grants from the fund, however, a business in the tourism industry will have to be at least 51% black-owned.
“Of all moments, the Covid-19 situation is not the time for BEE. Sakeliga invites businesses that feel they have been overlooked for relief owing to their BEE status, to contact us,” concludes le Roux.