Ministers clash over alcohol ad bill
Johannesburg - A proposed bill banning alcohol advertising has pitted two ministers against each other, triggering the Cabinet to intervene. The low-intensity war between Social Development Minister Bathabile Dlamini and Sports Minister Fikile Mbalula is brewing, as the latter argues that the government may lose half a billion rand if alcohol advertising is banned, as proposed in the bill.
The National Treasury, brought in to assist the deadlock, was unable to broker a deal within the interministerial committee on alcohol and substance abuse. The committee – headed by Dlamini – will raise the matter in cabinet next month.
If passed, the draft Control of Marketing of Alcohol Beverages Bill will see a complete ban on the advertising of alcohol. It will also raise the age at which people can buy alcohol from 18 to 21 and take a zero tolerance approach to drunk driving.
The Sunday Independent understands that in the committee, the departments of social development, health, education, justice, police and trade and industry want the bill, which was formulated three years ago, to be passed urgently.
However, the sports and arts and culture departments are concerned about the loss of revenue.
Alcohol companies sponsor major sporting and art events.
Sports apparently argued that they could lose R650 million in sport sponsorship – and has said that should the bill be passed, they would need additional funding to offset the possible loss of revenue.
The Sunday Independent was informed that tensions were high when the interministerial committee met this week to discuss the options. Treasury was asked to investigate several options.
The first is a 1 percent levy on the sale of all alcohol, which could be channelled to a fund for departments affected by the bill. Other options were to increase the already high excise taxes on alcohol or for the government to increase the funding to departments affected.
A further option was increasing the levy of the Department of Trade and Industry’s existing licensing condition, where the industry contributes 1 percent of all sales to mitigate harm caused by liquor.
Treasury, however, dismissed all the options.
The Sunday Independent has seen a note setting out Treasury’s position on the options.
“National Treasury does not support the proliferation of earmarking of taxes. A proliferation of earmarking of taxes does not conform to sound fiscal policy,” said the note.
Although Treasury said that the current excise tax regime could be used to raise additional revenue, it was concerned about the increase in illicit trade that could result.
Government departments would therefore need better enforcement measures.
“The need for additional financial assistance as a result of the introduction of the Control of Marketing of Alcoholic Beverages Bill should however follow the normal budget processes,” said Treasury.
Deputy Sport and Recreation Minister Gert Oosthuizen would not comment on the deadlock.
Social development spokeswoman Lumka Oliphant said there was no disagreement within the committee, but confirmed that “the committee is looking at different options with the assistance of Treasury on how to fund sports and recreation as they derive revenue through sponsorship and advertising”.
“The Department of Sport and Recreation appreciates the proposed bill and the detrimental effects of alcohol to South Africans,” she said.
According to a study done by Econometrix, the liquor industry makes a valuable contribution to the country’s economy.
About 4.4 percent – or R94.2bn – of South Africa’s gross domestic product can be traced back to the direct, indirect and induced impacts of the liquor industry. And its direct impact on the tax revenue is R19.5bn. The industry supports about 548 000 jobs, yielding R40bn in household income.
But according to the Department of Health’s presentation to the committee, the negative social impact of alcohol on South African society far outweighs the benefits.
South Africa rates among the top 10 beer drinkers globally.
Submissions by the Education Department were that while 13 percent of Grade 8 to Grade 11 pupils experimented with drugs, 19 percent participated in binge drinking.
And the Transport Department argued that within the data on non-natural deaths in South Africa, 61 percent of those who died as a result of violence, 41 percent of suicides and 56 percent of transport- related deaths had positive blood alcohol levels.