Business and labour call for lockdown relief from government and financial institutions

Labour minister says UIF has funds to support workers during Level 4 restrictions.

Organised labour and business are calling for income support and tax relief following the two-week Level 4 lockdown recently announced by President Cyril Ramaphosa.

Adjusted lockdown measures were announced on 27 June due to the increase in Covid-19 infections during the third wave of high infections in the country, and have resulted in harsher restrictions on trade and longer curfew periods as well as a ban on alcohol sales, among others.

The entertainment and hospitality sectors have been severely affected, with restaurants allowed to provide take-away meals only while liquor outlets, taverns, bars and gyms have been closed.

Business Unity SA (BUSA) and the National Economic Development and Labour Council (Nedlac) have called for measures like the Temporary Employer/Employee Relief Scheme (TERS) benefits and other forms of respite from financial institutions.

TERS was established at the onset of the first wave in March 2020 to assist those who lost their income due to the pandemic.

During a ministerial media briefing following the Level 4 lockdown announcement, Employment and Labour Minister Thulas Nxesi said the UIF Covid-19 TERS benefit scheme had distributed R60 billion to over 500 million laid-off workers – supporting them, their families and businesses and communities across the country.

“In response to the move to Level 4 lockdown, the UIF management has been locked in discussion with their actuaries to find surplus monies to address the new conditions. Remember, the UIF has a duty to safeguard the funds of its contributing members for the day when they have to draw down on the fund for ordinary UIF benefits in the case of retrenchment and unemployment. So paying out Covid-19 TERS benefits has always been something of a balancing act,” he said.

Nxesi added, “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, in particular the alcohol industry, over the 14-day lockdown.”

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.

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.

In a statement released earlier in the week, Cosatu acknowledged the government’s decision to minimise disruptions to the economy while seeking to save lives, however indicated that relief should be provided to sectors prohibited from trading or required to downscale.

This relief needs to come from not only the Unemployment Insurance Fund but also in the form of tax and rates holidays, and loan and premium payment holidays from banks and insurance companies, according to the statement.