New B-BBEE sector codes a double blow for already ailing tourism industry
3 July 2015
The draft B-BBEE tourism sector codes gazetted yesterday by the Minister of Trade and Industry, Rob Davies, will have a disastrous effect on our already struggling tourism industry, one of the key job-creating sectors in our economy.
I will therefore be making formal submissions to the Minister during the sixty days given for public comment, calling for the codes to be revisited and for greater input from stakeholders in the industry.
These codes are even more stringent than the already burdensome generic B-BBEE codes, creating additional hurdles which will negatively affect the tourism industry’s ability to create jobs. The following aspects of the codes are of particular concern in this regard:
The different thresholds for SMME’s which are exempt from the codes have been lowered as follows;
Exempted Micro Enterprises are now enterprises that make a total revenue of less than R 5 million per annum, slashed from R 10 million in the generic codes;
Qualifying Small Enterprises are now enterprises that make a total revenue of between R 5 million and R 45 million per annum, which is lower that the R 10 – R50 million bracket in the generic codes; and
Large Enterprises are now enterprises that make a total revenue of over R 45 million per annum, which is lower than the “above R 50 million” bracket in the generic codes.
The compliance target for “ownership” is 30% + 1 vote, rather than the 25%+1 vote under the generic codes; and
The target for supplier development is at 3% NPAT, higher than the 2% of the generic codes.
The DA firmly believes government’s focus must be on empowering and advancing those who are left out of the economy and trapped in unemployment. These codes, however, do the opposite and further benefit the enriched by stifling growth and entry into the industry. Access to opportunity that gives life and meaning to our hard won freedoms is being denied.
Moreover, these codes will serve as a double blow to the tourism industry, following last month’s introduction of new visa regulations by Department of Home Affairs which has seen both foreign and domestic tourism plummet.
The tourism industry constitutes 9% of our GDP and employs 1.5 million South Africans. Its growth and success is vital to growing our economy and creating jobs for the 36% of South Africans who cannot find work.
With a broad unemployment rate of 36.1%, it is unthinkable that such a set of job-killing codes could be approved by the Minister. It certainly brings into question this government’s commitment to solving the unemployment crisis.
Rather, every regulation, piece of legislation and set of codes should be guided and assessed in light of our country’s unemployment crisis.
The DA will continue to ensure that Black Economic Empowerment is truly broad based, for the benefit of the millions of disempowered South Africans who remain outside of the economy.
Statement issued by Geordin Hill-Lewis MP, DA Shadow Minister of Trade and Industry, July 3 2015
