Social partners at the National Economic Development and Labour Council (Nedlac) have agreed to set up a high-level team that will put together an economic recovery programme following a meeting with President Cyril Ramaphosa on Thursday.
The meeting between government, organised labour, business and the community constituency comes ahead of a highly anticipated national address where Ramaphosa is expected to inform the nation about how the country will proceed after government’s national state of disaster lapses on August 15.
Ramaphosa is facing pressure to fully reopen the economy with operations in the alcohol, tobacco, and tourism and hospitality sectors largely restricted even under advanced lockdown Level 3 of government’s Covid-19 risk-adjusted strategy.
Open up the economy
Cosatu’s parliamentary coordinator Matthew Parks said task team would consolidate the proposals made by the social partners into one position that will form the basis for the economic recovery trajectory for the country.
This should be done in the next three weeks, after which the social partners will hold a meeting to consider and adopt the plan. The plan will then be presented to cabinet.
Parks said there was a large consensus between labour, government and business on most issues regarding the economic recovery.
“Nedlac constituents agree that the economic crisis is increasing levels of vulnerability, including extreme poverty and hunger and that measures are required to stem further declines in GDP, a worsening of the budget deficit and deeper job losses,” the presidency said in a statement.
It said the team – which will be made up of “senior leadership” – will focus on job creation, having a sectoral approach, prioritising infrastructure, energy security and working on the bottlenecks to economic growth.
“We want to see as much of the economy opened up as possible,” said Business Unity South Africa CEO Cas Coovadia. He said there is no reason that alcohol or tobacco products should not be sold.
In advocating for an opening of the economy, Coovadia said this should be done in line with strict adherence to the requisite Covid-19 health protocols.
“There [has] been the second wave of infection in other countries, we can’t discount that, but I think if we manage issues like transportation and ensure that the health protocols are in place and are abided to I think we can manage this effectively,” said Coovadia, adding that the country should not allow the economy to get to a point where parts of it will not be in a position to recover.
He said more employees returning to work would also allow the government to leverage on the resources of the private sector to screen people, provide sanitation, supply masks and so on, particularly because a lot of employed South Africans live in townships and informal areas where social distancing is not possible.
“It manages a bit better in our view the health side but also the economic impact has been devastating,” he said, adding that while the government had the rescue package in place it’s clear that this support cannot be sustained much longer.
Action and save jobs
In a joint presentation to Nedlac and Ramaphosa on Wednesday trade union federation Cosatu, the National Council of Trade Unions (Nactu) and the Federation of Unions of South Africa (Fedusa) – which together represent three million workers across the economy – provided the government with a list of priority areas for the country’s economic recovery.
Labour expressed its concern about the number of “economic papers” coming from Treasury, government and the governing party’s economic arm while the same fervour is not being applied to implementation.
“We will not create jobs through a festival of papers,” said labour.
The proposal calls for the immediate implementation of the Jobs Summit agreement, particularly with regards to upscaling local procurement, propelling greater digitisation through the rollout of spectrum, decreasing data costs to allow work and learning at home, and supporting the commercial and emerging agriculture sector.
Parks said there also needs to be dedicated sectoral support for sectors that “are still bleeding”, such as tourism and alcohol.
Should restrictions in the economy be extended beyond August 15, labour says the government must extend the Unemployment Insurance Fund (UIF) Covid-19 Temporary Employment Scheme (Ters) for businesses and workers that will be impacted by full or partial restrictions.
Support to businesses should also come with conditions to retain workers, with labour saying that businesses cannot continue to receive bailouts using taxpayer money only for them to retrench workers.
“Equally we must use incentives to incentivise employers to create new jobs and to look at measures which can avoid overburdening companies with unaffordable levels of debt.”
Labour also wants the removal of blockages to the Covid-19 guarantee loan scheme for small businesses, which has failed to have the necessary take-up despite being the biggest component of the government’s economic support package.
Parks said it is also critical for the government to show that it is dealing with corruption, saying that the personal protective equipment (PPE) covidpreneur episode is just one issue and that the infrastructure programme is likely to become “the next epicentre of looting”.
“One thing we said we want is for the rapid response courts to deal with corruption, as we had [with issues related to] the 2010 World Cup,” he added, saying that reports of widespread corruption without consequence are demoralising and dampen confidence, which the country cannot afford.