Customs fraud destroys South African jobs

"We believe that the allocation towards the production incentive for the CTFL industry, as well as other allocations such as the jobs fund and tax incentives will further help to stabilise this industry by securing employment and industrial capacity," Sactwu said.

The union urged government to ensure that incentives were linked to commitments by businesses to grow employment and comply with tax and labour laws.

Gordhan on Wednesday said that additional allocations had been made in the 2011-12 Budget in support of industrial and economic development over the medium term, and this included clothing and textiles production incentives.

"We are especially encouraged by the announcement of a major programme to tackle customs fraud in the clothing and textile industry. While we have seen some good work recently from the SA Revenue Service to deal with this problem, a better resourced and co-ordinated programme is required. Customs fraud does not only destroy South African jobs, it also deprives the fiscus of income," it said.

One third illegal imports

Sactwu added that the need for this initiative was reflected by the fact that an estimated one third of all clothing and footwear sold in SA was imported illegally.

"For some time, we and Cosatu have been calling for a revision of the mandate of our Development Finance Institutions (DFIs) to allow these to focus much more on the creation of decent work and we appreciate that our call has been heeded with the establishment of a Development Finance Institutions Council," it said.

The union said it feared that the focus on the manufacturing sector, especially the allocations towards it, would be undone by SA's overvalued currency.

"We welcome the fact that the Budget commits government to investigate further tools, including tax and regulatory measures, to deal with the strong rand and we urge government to adopt such tools because while the rand has weakened recently, we fear that this is not because of the current tools utilised, such as the purchase of foreign reserves, but rather because of investment decisions taken by third parties.

"We need to be equipped to deal with future inflows of speculative investments," concluded the union.