South Africa\u2019s ruling party has proposed using state-run unemployment and compensation fund surpluses to help rescue the country\u2019s debt-laden power utility, raising the ire of labour unions.<\/p>\n
In discussion documents released late last week, the African National Congress said the Unemployment Insurance Fund and the Compensation Fund had combined surpluses of R225 billion ($15 billion) in 2019.<\/p>\n
Instead of investing this in listed companies and government bonds it should instead be used for \u201ceconomic reconstruction\u201d the party said. Power utility Eskom has debt of R484 billion.<\/p>\n
“Business and labour would agree that social security funds could be tapped responsibly to address social and economic needs, in particular to deal with Eskom,” the ANC said. It also said the funds could be used to help finance industry and improve education.<\/p>\n
The proposal, which ties in with earlier calls to use civil servants\u2019 pension funds to reduce Eskom\u2019s debt, has encountered opposition from labour unions, which are key allies of the ANC and have criticized the government for mismanagement and corruption at the utility.<\/p>\n
Virus focus<\/strong><\/p>\n \u201cThe focus of the Unemployment Insurance Fund at this juncture has to be on availing every resource that it can to assist the millions of workers who have lost wages and jobs\u201d as a result of the coronavirus, the Congress of South African Trade Unions said in a response to queries.<\/p>\n \u201cIt cannot afford to continue to carry the nation on its shoulders alone.\u201d<\/p>\n The 1.8 million-member union federation, South Africa\u2019s biggest labour group, has called for more assistance from commercial banks to boost the stagnant economy and help Eskom rather than a reliance solely on workers\u2019 contributions.<\/p>\n \u201cIt is critical that workers determine where their funds are invested,\u201d Cosatu said.<\/p>\n The UIF has used some of its surplus to compensate workers who lost their jobs as a result of the impact of the virus outbreak. Business Day newspaper reported on the ANC proposal earlier.<\/p>\n
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