Tuesday, 1 September 2015

Steel tariff hurts downstream small businesses

Amidst all the loud and self-congratulatory hoorays and back-slapping between government, unions and the steel manufacturers, something is being missed: the 10% tariff on steel imports is never going to solve the structural problems of the metals and engineering sector of which steel-making is just a small part.

Minister of Trade and Industry Rob Davies' hypocrisy in laying into me in Parliament today is breath-taking. Earlier, I had tabled a motion calling for a debate on the matter:

"I hereby move on behalf of the Democratic Alliance that at its next sitting this house debates the long-term and potentially job-jeopardising impact of imposing a 10% duty on steel imports."

Davies accused me of opposing measures which  would lead to the saving of thousands of jobs. Incensed, I grabbed the nearest microphone and shouted "what about small business?"

Davies, and his colleague Ebrahim Patel, have long called for "developmental pricing" of steel to assist the beneficiation of iron ore. To this end they have done a deal with a Chinese steel maker to build another steel plant in South Africa, this at a time when there is a steel glut and China is dumping steel wherever it can at rock-bottom prices.

Now, Davies is caving in to big unions and big business by agreeing to a 10% tariff on imported steel. So much for developmental pricing!

As the CEO of Neasa, Gerhard Papenfus, says over and over again (see here), collusion in this sector (and others) had led to the destruction of hundreds, not tens of thousands of jobs over the past decade or more, as the core of our industrial base is hollowed out by a combination of imposed wage increases, restrictive labour laws and low productivity.

Until the needs of small businesses are heard, we can kiss goodbye the prospect of our economy creating the 11 million new jobs by 2030 envisaged in the NDP.

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