Commenting on a joint statement by the Departments of Environmental Affairs and Trade and Industry that they were currently finalizing an approach to carbon tax, Mr Nyatsumba said that it was most unfortunate that the Government appeared to be more concerned about squeezing the economy to generate even more taxes than it was about our under-performing economy and the growing army of the unemployed. He said it was inevitable that the introduction of a carbon tax would further stifle the economy and render South Africa even less competitive internationally.
Mr Nyatsumba said that South Africa, whose economic outlook had recently been downgraded both by ratings agencies and the revered World Economic Forum, needed to follow the worthy example set by Australia early this year which announced the repeal of carbon taxes with effect from 1 July 2014.
“Our view is simple: a developing country like South Africa cannot afford to constrain the economy even further, at a time when more jobs need to be created, by introducing carbon tax when far more developed countries like the United States of America and Australia have not done so,” said Mr Nyatsumba.
He said that while SEIFSA encouraged responsible corporate conduct and supported sustainability, the Federation nevertheless remained firmly of the view that there was no reason for South Africa, which contributes less than 1% to global emissions, to take the lead in climate change mitigation by being one of the few countries to introduce a carbon tax.
“South Africa’s economy is currently doing very badly. We are a Third-World country which needs to attract investment that will, in turn, stimulate economic growth. The introduction of carbon tax will not help us achieve this goal,” Mr Nyatsumba said.
He strongly urged the relevant Government departments to abandon their ill-advised plan to introduce carbon tax – just as Australia wisely did two months ago.
“The South African economy has been under siege in recent years, with fairly negligible growth at a time when higher levels of growth are needed in order to create much-needed jobs. It makes no sense at all for the Government, which professes to be committed to job creation, to seek to burden local business even further through the introduction of carbon tax,” Mr Nyatsumba concluded.