Manuel warned a Cape Town hotel – which he did not name but said it was close to Parliament – which was charging R120 for a toasted sandwich that it would price itself out of the tourism market.
Addressing pupils from Western Cape schools on Wednesday – congregated in the Old Assembly of Parliament to discuss his recent February Budget – Manuel noted that “the balance of payments situation” in South Africa “is not so bad”.
However, he said South Africans had to look at the question of competitiveness, particularly in the tourism market.
On the one hand South Africa had to ensure that workers were able to compete “in a hostile global economy”, but on the other hand he warned against lavish pricing structures in the domestic economy.
“There is a hotel not far from here that will charge you R120 for a toasted cheese sandwich because they think that in England it will cost 10 pounds.
“They will price themselves out of the market,” warned the Finance Minister, adding that: “Clearly we as South Africans need to be in discussion about that (uncompetitiveness). We can’t lose revenues.”
He noted with approval that there had been a vigorous discussion during the Christmas season about the “exorbitant” pricing of seafood at Cape Town restaurants.
“If we price ourselves out, tourists go elsewhere. These are issues we need to work through together,” said Manuel, noting that there were no price controls in sectors such as tourism. – I-Net Bridge