Government 'trying to find surplus monies' to help businesses hit by lockdown: Thulas Nxesi

Government 'trying to find surplus monies' to help businesses hit by lockdown: Thulas Nxesi

The government confirmed on Tuesday it was looking to provide income support to businesses effectively shut down by the level 4 lockdown restrictions announced on Sunday.

Speaking at a media briefing on Tuesday, employment and labour minister Thulas Nxesi said “social partners” involved in the National Economic Development and Labour Council (Nedlac) would be “engaging” with each other this week to “thrash out a plan for income support” for those industries closed by the government under the restrictions.

Nedlac is the vehicle used by the government, labour and business to cooperate to find negotiated solutions for all parties.

Nxesi said in response to the level 4 lockdown, the Unemployment Insurance Fund (UIF) management “has been locked in discussions with actuaries to find surplus monies to address the new conditions”.

“The UIF has a duty to safeguard funds of its contributing members for the day they have to draw down on the fund for ordinary UIF benefits in the case of retrenchments and unemployment. So paying out Covid-19 temporary employee/employer relief scheme (Ters) benefits has always been something of a balancing act, where we have to look at affordability versus the need.

“The social partners will be engaging at Nedlac this week to thrash out a plan for income support. From the side of the UIF, we believe we will be able to afford to support laid off workers in sectors which have been closed by government,” said Nxesi.

He emphasised he was referring in particular to sectors such as the alcohol industry, which is closed during the 14-day lockdown announced by President Cyril Ramaphosa on Sunday night.

He said when he referred to the alcohol industry, he did not mean the entire value chain in that sector as some “production is continuing”.

He said during the pandemic the UIF Covid-19 Ters benefit scheme had distributed more than R60bn to laid off workers, “supporting them, their families, their businesses and communities across the country”.

Responding specifically to additional questions from Business Times about the possibility of the reintroduction of Ters support to those sectors shut down under level 4, Nxesi said he did not “want to pre-empt the discussions of Nedlac on this matter”.

“This is scheduled to be discussed on Thursday. We will see what comes out of that.”

The minister emphasised there were three different kinds of UIF payments in the system.

One was the ordinary UIF support provided to individuals after they had been retrenched, while the other two types of payment were temporary and specifically related to the Covid-19 pandemic.

The Covid-19 Ters relief programme was managed by the Commission for Conciliation, Mediation and Arbitration (CCMA) and kicked in when employers had to put staff on short time or could not afford to pay them in full because of Covid-19 restrictions. The other, which is what would be discussed at Nedlac this week, became applicable specifically when an industry was completely shut by the government.

On Monday, Martin Kingston, chair of the steering committee of Business for SA (B4SA), said the organisation would ask the government to provide relief for those industries closed down by level 4 restrictions.

In an interview with Business Times, Kingston said the level 4 restrictions announced on Sunday were a “very responsible and appropriate set of interventions” in line with “what we anticipated and advocated”.

“There are a limited amount of industries that are affected by restrictions, and at the top of the list are the leisure, hospitality and tourism industries. Even there they acknowledge government has no choice at this time. But in return we, as business, are saying we need to see what relief can be provided to those sectors adversely impacted by these decisions.

“That is where we are going to have to reorientate our attention. We are in discussions about how we can engage with government to see whether we can motivate for additional relief.”