Organised business and labour in the National Economic Development and Labour Council (Nedlac) are united in their demand for income support for workers and tax relief for businesses in economic sectors that are closing down during the level 4 lockdown which kicked off on Monday.
On Tuesday, employment & labour minister Thulas Nxesi said the Unemployment Insurance Fund (UIF), which disbursed about R60bn under the Temporary Employer/Employee Relief Scheme (Ters) to support workers during the hard lockdown in 2020, has sufficient funds to provide support over the two weeks.
Nxesi established the Ters scheme in March 2020 to cushion those in formal employment who were expected to lose their income due to the pandemic. Payments were made to 267,000 employers and 5.4-million employees at a cost of R58.7bn between April 2020 and March 2021.
The UIF had an unaudited surplus of R39.2bn as at March 31 2021, about R54bn less than a year before, according to its spokesperson Makhosonke Buthelezi.
Business Unity SA (Busa) president Sipho Pityana told Business Day on Thursday that Busa backs the call for income support for workers and tax relief for businesses during the 14 days of the level 4 lockdown.
“We must revisit the support measures introduced last year such as the Ters benefits, and financial institutions must consider special relief measures in a much more targeted way,” Pityana said.
Cosatu’s delegate to Nedlac, Matthew Parks, said the federation supports the principle that if the government closes down or restricts economic activity due to the lockdown, the UIF must provide income support for affected workers.
Nedlac is a social dialogue platform set up for the government, business, labour and community stakeholders to discuss and agree on the country’s economic direction.
“We are glad that minister Nxesi said the government and UIF will provide support to workers as there are sufficient available funds in the Ters scheme,” Parks said.
The parties, which will meet at Nedlac on Friday, hope to reach an agreement soon so that “Ters applications can start soon”, he said.
Parks said labour wants the Treasury to provide tax relief for all businesses that will be affected, including the liquor industry. “The banks and insurance companies need to effect payment deferrals on these workers and industries. The liquor industry doesn’t need to pay excise duty if they can’t sell their products,” he said.
President Cyril Ramaphosa announced the move to an adjusted level 4 lockdown on Sunday, to free up hospital beds taken by trauma patients as Gauteng health-care workers struggle to cope during the Covid-19 third wave driven by the highly infectious Delta variant.
While Ramaphosa indicated the harsher restrictions will be needed for 14 days, he made no commitment as to when the restrictions would be eased. “We will assess the impact of these interventions after 14 days to determine whether they need to be maintained or adjusted,” he said.
Sectors that have been closed under the level 4 lockdown include restaurants — for sit-down meals — liquor outlets, taverns, bars and conference facilities, theatres, gyms, galleries and cinemas. The on-site and off-site consumption of alcohol is prohibited, as are social gatherings.
This is the fourth liquor sales ban enacted by the government. The previous three lasted for a collective 19 weeks and cost the industry up to R37bn in lost sales and the state R27bn in taxes.
Vinpro, the body representing most wine producers and grape farmers, has filed an urgent interdict to lift the ban on the sale of alcohol in the Western Cape and asked the court to allow the Western Cape provincial government to make its own rules on liquor sales. The expected court date is Friday.
Brewer SAB, owned by AB InBev, has yet to comment publicly on the alcohol sales ban after withdrawing R5bn in investment last year due to the bans and recommitting R2bn in production upgrades this year on the assumption that there would be no further blanket prohibition.
By Thursday, 10 days of the 14-day level 4 lockdown remained. The lockdowns have battered the economy, which declined 7% in 2020, causing about 1.4-million people to lose their jobs.
According to the Stats SA quarterly labour force survey released recently, unemployment in the first quarter of 2021 rose from 32.5% to 32.6%, the highest since the survey began in 2008.
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