Not fair to close South African businesses without any financial support: Western Cape

With the announcement that South Africa’s adjusted level 3 lockdown restrictions will remain in place until 15 February, the Western Cape government has called for the extension of UIF Covid-19 TERS support to help struggling South Africans.

The Temporary Employer-Employee Relief Scheme (TERS) benefit was one of the social protection schemes introduced by government in direct response to the economic effects of the pandemic – however, it concluded at the end of 2020.

David Maynier, the Western Cape’s provincial minister of Finance and Economic Opportunities, said that the tourism and hospitality industry has already been hard-hit, and jobs are being lost as a result of the restrictions.

This includes the continued closure of the beaches, the curfew and the alcohol ban which are having a devastating impact on businesses and jobs in the Western Cape.

“We have received many emails from businesses and individuals, who have held on for the past 10 months, but simply can’t continue to sustain their businesses or pay their employees with the current restrictions in place.

“It is simply not fair to expect tourism, hospitality and liquor businesses to continue with limited operations or even close during the peak summer season without the necessary financial support to ensure they remain operational and can retain their staff during the Alert Level 3 restrictions.”

Maynier said he has written to Employment and Labour minister, Thulas Nxesi, to urgently extend the UIF Covid-19 TERS scheme for the duration of the Alert Level 3 restrictions.

“Approximately R56 billion in UIF Covid-19 TERS pay-outs have been distributed for the period from the end of March to 15 October 2020.

“Additional pay-outs can be funded by the UIF’s total investment portfolio of R114 billion as at 31 March, which includes R60 billion in liquid assets and R54 billion in illiquid assets.”

Maynier said that these funds could provide the lifeline that businesses and employees need to sustain their operations while these restrictions on the economy are in place.

Out of money

Maynier’s plea may ultimately fall on deaf ears as president Cyril Ramaphosa has indicated that government simply no longer has the finances to offer Covid-19 grants.

Ramaphosa told 702 that South Africa does not have the money to provide the same kind of relief packages which the government offered during the first wave of the pandemic.

“We do not have the money, that is the simple truth,” he said.  “We are constrained from a financing point of view.”

“The relief measures we announced last year amounted to about 10% of our GDP, which is quite big for a little economy like ours.

“Right now we are at a stage where we have to fund the vaccines, which is going to amount to a lot of money as well. We are constrained,” he said.

Read: What economists say about another rate cut for South Africa

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Not fair to close South African businesses without any financial support: Western Cape