State relief for tourism sector held up by quotas court challenge
Tourism minister Mmamoloko Kubayi-Ngubane argues that her department is obliged by law to grant relief funds according to BEE requirements
A key government intervention aimed at cushioning the tourism sector from the distress caused by the Covid-19 pandemic has been put on hold amid a legal battle on the empowerment requirements introduced by the minister.
The government is yet to disburse the R200m Covid-19 relief funding for the sector as it awaits a court outcome on its decision to use race as criteria to help distressed companies.
Afrikaner rights group AfriForum and trade union Solidarity approached the Pretoria high court on Tuesday to review and set aside the decision.
The court reserved judgment, but AfriForum and Solidarity said the judgment would be delivered “by e-mail to all parties within the week”. The minister said they expected the outcome by Friday.
“We have not distributed anything due to the court case,” tourism minister Mmamoloko Kubayi-Ngubane said on Tuesday afternoon.
Kubayi-Ngubane’s decision to provide support to distressed firms and establishments in the sector based on B-BBEE codes, among other considerations, raised the ire of some in the sector who argued these would disqualify many companies from accessing government funding to mitigate the effect of the coronavirus pandemic.
“In respect of the court, while businesses were still able to apply, the department has kept the processing of applications on hold,” said Kubayi-Ngubane.
“The department will be guided by the outcome of the court but stands ready to support the businesses in distress. Thus far there are over 10,000 applications.”
The minister said the effects of the coronavirus meant tourism-related activities were nonexistent in SA.
“We have commenced work with global, continental and national stakeholders to develop a post Covid-19 tourism recovery strategy. Suffice at this stage to say that the industry will be focusing on three phases: survival, recovery and then prosperity,” said Kubayi-Ngubane.
Solidarity CEO Dirk Hermann said BEE specifically aimed to redress the inequalities of the past and that there was no room for it in the use of emergency relief funds in the midst of the Covid-19 pandemic. “Race does not play a role in the pandemic and therefore BEE cannot play a role in the allocation of emergency funds,” said Hermann.
Kubayi-Ngubane has said her department is obliged by law to grant relief funds only according to BEE requirements.
“BEE and the many administrative and financial obligations that come with it, now suddenly apply to these businesses ... amid the Covid-19 pandemic. The fund excludes large enterprises, most microenterprises that are white-owned and small enterprises that are not registered for tax purposes, most of which are black-owned,” Hermann said.
He said two out of every three employees in the tourism industry were black: “In other words a total of 350,000 employees will not benefit from the fund.”
It is a pity that in times of such a universal crisis, politicians cannot set aside their own prejudices for the sake of the overall wellbeing of the country’s citizens, said Hermann.
He called for the fund to be available to anyone who needs help regardless of race.
“The department of tourism still chooses to see colour rather than need. Many breadwinners, most of whom are black, have lost their income and now cannot benefit from this relief fund.”