David Harrison, the CEO of the DG Murray Trust, which has been advocating for 10 nutrient-rich foods to be exempted from Value Added Tax, said the food security crisis was essentially a protein security crisis.
The President’s plan to expand the basket of zero-rated foods is good news for hard-pressed consumers, but won’t do much to reduce malnutrition in South Africa, say civil society organisations.
In his Opening of Parliament Address (OPA) last week, President Cyril Ramaphosa said, “We will look to expand the basket of essential food items exempt from VAT and undertake a comprehensive review of administered prices, including the fuel price formula, to identify areas where prices can be reduced.”
David Harrison, the CEO of the DG Murray Trust, which has been advocating for 10 nutrient-rich foods to be exempted from Value Added Tax, said the food security crisis was essentially a protein security crisis.
“Families just can’t afford the protein their children need to grow. More VAT-exempt products will mean a bit more money in the pocket, but not enough to change buying patterns. What we need is deep discounting of an essential list of high-protein foods — by 25-30% — rather than spreading a 15% price reduction more widely.
“We need to be clear on what the government is trying to do. If it is just to put a bit more money in people’s pockets, then more zero-rated products might help, provided that retailers pass the price reduction on to their customers. But if the government has a long-term economic growth agenda, then it must bring down the rate of stunting that is so damaging to children’s brains, educational outcomes and economic growth,” said Harrison.
Currently, 19 food products are VAT-free, including brown bread, rice, dried beans, eggs, milk, dried mealies, vegetable oil, fruits and vegetables.
Harrison said the government should add high-protein foods to the VAT-free food basket.
Unaffordable
“There are children who are severely malnourished — who don’t get enough protein and carbohydrates — but our main problem is that at least a third of families cannot afford the protein they need every day. That is why we have a relatively low prevalence of children under five years who are underweight (about 5%), but a very high rate of nutritional stunting (28%).
“The only way to get the essential amino acids for body growth and brain development is through an adequate diet. If the government does increase the list of zero-rated products, it must start with high-protein foods like peanut butter and chicken,” said Harrison.
The DG Murray Trust has proposed a list of 10 best-buy products that should be treble-discounted, through VAT exemption (and eight of the 10 are already); through manufacturers and retailers selling one label of these products at no profit; and through a matching subsidy from the government.
Spokesperson for the #PayTheGrants campaign Elizabeth Raiters said, “We do not think GNU will be able to reduce the cost-of-living crisis in the next five years. There is no clear plan from them to actually tackle food prices. I truly think the government should increase the grants [that are] currently below the food poverty line, I don’t think expanding the zero-rated food basket will make a difference as the value of the grants is low. Also, I think it’s time for the universal basic income grant to be implemented. That would be the only way forward to curb hunger.”
The president of the General Industries Workers Union of South Africa, Mametlwe Sebei, said parties in the Government of National Unity prioritised profits over people. “The President spoke as if he hasn’t been at the head of government … for over a decade. We need a concrete plan … [to assess] what has [gone] wrong and how they will correct that,” said Sebei.
This article, penned by Naledi Sikhakhane, was first published by the Daily Maverick on 21 July 2024. Read it here.
