Ramaphosa told to improve unemployment benefit, boost welfare

President Cyril Ramaphosa
President Cyril Ramaphosa

President Cyril Ramaphosa was told that his government needs to improve the efficiency of its unemployment relief fund and temporarily boost welfare payments to mitigate the fallout from the coronavirus outbreak at a meeting with labour and business.

At a special meeting of the National Economic Development and Labour Council (Nedlac), labour union representatives told him that a R40 billion fund to compensate temporarily laid-off workers is not being distributed fast enough and the 17 million people on welfare need more assistance. Nedlac includes representatives of government, labour and business.

Labour unions and business have questioned the ability of the Unemployment Insurance Fund (UIF), an existing body that compensates people who lose their jobs from a pool of money built up from employer and employee contributions, to distribute the urgently needed cash.

"The capacity of the UIF is a major, major" concern, said Matthew Parks, parliamentary coordinator for the Congress of South African Trade Unions, the country's biggest labour group. "There is a need to increase social grants."

South African welfare payments, particularly state pensions, are seen as a way of supporting the country's poorest. Often a number of people depend on a single pension payout.

Ramaphosa was also told that insurers, pay-day lenders and medical aid companies need to do more to support the flailing economy, Parks said. With the country in lockdown few people are driving, burglaries are down and insurers' profits are likely to rise, giving them room to reduce or temporarily halt charges to their clients, he said.

"The meeting considered various suggestions on scaling up financial support to vulnerable households," the presidency said in a statement late Friday. It "agreed there was a need for greater consistency from financial institutions such as banks when it came to relief measures to heavily indebted and struggling clients."

Cabinet is due to meet on 20 April to discuss economic interventions after a 15 April meeting ended without any decisions being announced.

The country also needs to step up testing for the virus if it wants people to go back to work and to work in a safe environment, Parks said.

About 95 000 tests have been undertaken in a nation of 59 million people. To date 2 783 infections have been confirmed in South Africa and 50 people have died from the virus.

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