ON New Year’s Day 2021, something uniquely extraordinary occurred at Chris Hari Baragwanath Hospital in Soweto.
The hospital – which has a storied healthcare and political history that can be traced back to its opening by then prime minister Jan Smuts in 1942 – is one of the biggest in the world and serves as a centre of healing and learning in South Africa.
Its location in Soweto and in Gauteng, where so many of South Africa’s intersectional issues are distilled and confronted, means its case studies provide some insight into the state of the republic. Over the years, as the population of Soweto and its surrounding areas grew and the hospital became the pivotal healthcare centre, its various case studies came to reflect the emerging trends in social and healthcare issues across the community.
One unfortunate case study relates to the high incidences of trauma cases that would be reported at the hospital during the festive season.
In line with the festive mood of the period, alcohol consumption levels and alcohol-related incidents have always been high – particularly on New Year’s Eve. Hospital workers have therefore become accustomed to treating more cases in trauma and emergency units during that time.
Until 31 December 2020.
During that time, the country was in Covid lockdown mode and access to alcohol and gathering spaces was prohibited. This meant alcohol was not only difficult to access, but centres of social gathering – where conflict among the inebriated occasionally happened and turned violent enough for trauma units to be called to action – were equally inaccessible.
As a result, the hospital reported a completely empty trauma unit on New Year’s Eve for the first time in its recorded history.
While a snapshot of a single day would not generally sway long-term public policy issues, this provided a snapshot of the intersectional issues associated with the country’s healthcare, finance and governance systems.
Health and safety
From the prism of healthcare considerations, it is a known fact that alcohol consumption beyond a particular threshold triggers adverse behaviour or, at the very least, reduced vigilance from alcohol consumers.
The implication of alcohol intake is that once one loses firm control of their faculties, the risk of accidents and incidents escalates.
When consumers of alcohol then seek to drive on the roads, the danger is obvious enough for the laws of the country to specifically target this problem.
In addition to accidents and incidents, long-term alcohol consumption provides a fertile breeding ground for other types of diseases that are related to consumption.
According to the World Health Organisation (WHO), over 5% of the global burden of disease and injury is attributable to alcohol. Six years ago, the organisation estimated that around 60% of ‘South African alcohol consumers over 15 years old engage in heavy episodic drinking’.
This simply means that alcohol intake has an impact on the healthcare system as public healthcare resources have to cater for the various incidents and accidents associated with alcohol consumption.
For the healthcare system, any interventions that address the incidences of high consumption solve immediate problems in terms of trauma cases as well as long-term problems in terms of alcohol-induced long-term disease.
Getting the balance between the healthcare considerations and the resource dimension is the intractable challenge for policymakers.
A burden and a blessing
In a country where it is readily consumed, alcohol can be a burden and blessing for the nation.
As a source of tax revenues, the alcohol industry is remarkably lucrative for a nation in dire need of funds.
At every budget speech, sin taxes are closely watched as increases are welcomed by those who want more resources to be available to the state as well as those who see additional taxes as a necessary disincentive for excessive levels of consumption.
As an employer and contributor to multiple economic and supply value chains, the industry plays a significant role in the economy at large.
Any policy shifts that end up killing the industry in parts have intersectional effects on the economy.
The most acute and linear relate to the industry’s employment and business support patterns – but equally important in assessing the effectiveness of taxes and levies as an instrument of intervention is whether the public health and safety systems are able to work together to achieve the intended outcomes.
If increases in taxes and duties only serve to fuel an illicit economy where health and safety protocols are unobservable and cash flows undetected, the best-laid plans actually end up undermining both the healthcare case (illicit, unregulated alcohol is a notable health hazard) and the public resource case as the taxes envisaged never materialise.
Deliberations on this matter are important
In the aftermath of the latest medium-term budget statement, National Treasury has called on stakeholders to contribute to the conversation regarding the taxation of alcohol in the country.
As was the case before when the last great deliberations were canvassed in 2014, the primary intentions remain clear – using taxes and duties as an instrument of tackling excessive consumption levels in order to address the consequential effects on the healthcare system and health profile of the nation.
As was the case in 2014, the conversation will be polarising as multiple stakeholders working from a starting point of divergent persuasions and perspectives seek to find consensus that will address the healthcare dimensions, the public financing dimensions and the safety and individual choice dimensions.
The published period for comments – 30 days – seems to underestimate the complexity of considerations necessary for proper considerations of the interrelated issues.
What we do know is that, unlike the last round of substantive deliberations, we have:
- Case studies like the Baragwanath New Year’s Eve story; and
- The obvious trends in public finances that call for more resources to be marshalled.
There is also the less attractive proposition that in the absence of proper legal and security measures in place to combat the rise of the black market, the best-planned intentions may sound wonderful in theory, but end up being sabotaged by the lack of comprehensive understanding and assessment of all the moving parts and the challenges they each provide.
Follow Moneyweb’s in-depth finance and business news on WhatsApp here.
