Questions around fairness of business relief fund
This after the government decided to use race (B-BBEE) as a deciding factor in who to assist in the tourism sector.
With international travel banned and a lockdown enforced in many countries, those who earn an income from tourism are struggling.
To assist, the government launched a R200 million Tourism Relief Fund. The aim is to provide assistance to small, micro and medium-sized enterprises (SMMEs) by way of a once-off capped grant of R50 000 per entity that qualifies.
The fund is for tourism establishments such as resort properties, B&Bs, guest houses, lodges and backpackers, restaurants (not attached to hotels), conference venues (not attached to hotels), car rental companies, tour operators and travel agents.
Thoko Didiza, the minister of Agriculture, Land Reform and Rural Development, also announced that B-BBEE would be a factor in allocating R1.2 billion worth of aid to emerging and small-scale farmers.
It has been alleged other government ministers would be applying the policy when providing relief in their sectors.
Several organisations have threatened legal action on the basis that the pandemic was not the time to implement race-based policies.
In a statement, John Steenhuisen, leader of the DA, called on President Cyril Ramaphosa to immediately instruct ministers in his Cabinet to comply with his government’s own assurances that assistance to Covid-stricken businesses would be available to all South Africans.
He claimed that the party had seen a letter written by Kubayi-Ngubane to James Vos, mayoral committee member for economic opportunities in Cape Town, that her department would be guided by the BEE codes in administering the Tourism Relief Fund.
He said there were also indications that relief in the agriculture sector would exclude commercial farmers and would only be available to emerging farmers.
“When news broke almost two weeks ago in a leaked draft document by the Department of Small Business Development of the government’s intention to racialise the relief effort, they quickly tried to backtrack.
“First, this document, stipulating a 51% black ownership requirement, was called ‘fake news’, but it soon emerged that it was a legitimate, albeit earlier, draft of the government’s SMME relief plan.”
He said it was fast becoming apparent that race was always going to be one of the deciding criteria when applying for government assistance.
Haniff Hoosen, DA MP, said the government needed to stand up and support all communities in a time of need.
“If it is being done so on the basis of race classification, it will have the opposite effect because many people from black/Indian communities also work for establishments owned by white communities and they will suffer the consequences when these establishments shut down.”
The Institute of Race Relations labelled the decision discriminatory.
Hermann Pretorius, IRR deputy head of policy research, said race-based policies should not be used to determine who received help
“Racial discrimination is wrong. If the best the ANC can come up with is that there’ll only be discrimination against some people, then it shows the ANC of 2020 fundamentally misunderstands both racial discrimination and racism – wilfully practising both.
“By defending blatantly discriminatory government policy in this way, it is clear that the ANC has no real interest in non-racialism, but only in a perverse indulgence of our-turn-to-eatism.”
Pretorius said BEE never worked in the past and would not work now.
“To have pursued race-based policies before this pandemic crisis was wrong, unwise, and destructive – to pursue such policies now is callous.”
Pretorius said the BEE guidelines went against what Ramaphosa said when he called for all South Africans to work together during this period.
The IRR is looking at pursuing legal action to stop the BEE requirement.
It has also started a petition for people to sign on their website.
Sean Moodley, chief executive of the Institute for Anti-Racism and Social Cohesion, said he understood the need for some form of criteria to assist but was opposed to race being included.
“Covid-19 is a virus that has taken us all by surprise. It is something we have never experienced before, and we cannot have an existing blueprint to guide us.
“We don’t know what the future holds and new policies should be developed that are fitting for the cause. This has nothing to do with the historical past. Everyone is being affected, and the virus does not choose race.”
Solidarity, a trade union, last month brought an urgent application against the Department of Small Business Development and the Department of Tourism in the Northern Gauteng High Court to stop the payment of any funds.
Last week, the union received a notice indicating that the departments would be opposing the urgent application.
Anton van der Bijl, head of labour law services at Solidarity, said it intended making their case at the end of April.
“It is clear that the government refuses to do away with its racial ideology, even in a time of need. All South Africans must be awarded an equal and fair opportunity to qualify for the emergency funds made available by the government,” said Van der Bijl.
AfriForum, a civil rights organisation, also plans to approach the courts with an application for review against the Minister and the tourism department for racial discrimination.
Kallie Kriel, chief executive, said: “In these times of crisis, everyone should stand together against our mutual enemy - Covid-19. It is tragic and immoral that the government is continuing to promote its race-based agenda.
“There is a big difference between BEE and support during the crisis.”
Ravi Pillay, Finance MEC for KZN and a member of the ANC, denied the fund was discriminatory.
Pillay confirmed that the fund would be guided by B-BEE principles but said small business owners had nothing to worry about.
He said the fund would accommodate Indians, coloureds and Africans and would not totally exclude whites.
“Yes, this is a properly targeted grant, but we are living through a national crisis, and this is a time for all to pull together, not a time to deal with historical imbalances.”
Narend Singh, an IFP MP, said he had business owners calling him, distressed that they would not qualify but he assured them that there was no reason for concern.
“We checked with the government and we were told that anyone with a small business can apply. BEE is a policy followed by every company and it doesn’t mean if you apply you won’t get it.”
However, he asked business owners who were experiencing colour-based discrimination to contact the IFP and they would try to help.
Yashica Padia of the Active Citizens Movement believed the minister’s actions were in line with the legislation but said the fund must be handled transparently.
“What we are demanding is transparency in the awarding of grants. This should not be an opportunity for more corruption. All beneficiaries must be truly deserving and all processes must be transparent.”