President Cyril Ramaphosa addresses the nation following a special cabinet meeting on matters relating to the coronavirus epidemic, mass celebrations, will be cancelled and schools will be closed until after Easter, 15 March 2020. Picture: Felix Dlangamandla
In a statement on Tuesday, DA MP Geordin Hill-Lewis called on President Cyril Ramaphosa to use his evening address to announce an economic response package that would respond to the growing incidence of real hunger and food shortages in South Africa, “and to the restive impatience with ‘hard’ lockdown that many South Africans are starting to feel”.
He said it was not a time for the president “to shy away from bold decisions and big spending commitments”.
He advised the president to say something in line with the DA’s own proposed direct cash support of R1,000 per social grant recipient (across all grant types) for the next three months.
“This would cost R50 billion, and would be the most significant support the president can and should announce. It would immediately alleviate the now widespread hunger being suffered by many.
“This intervention would ultimately cost far less than the initial price tag, with much of it coming back into the fiscus as tax revenue, due to the multiplier effect, as long as government reopens the economy soon.”
He said the DA had also proposed a R50 billion loan programme to small businesses.
“This support should take the form of a low-interest loan for any business, repayment of which will only commence in 12 months. There should be no restrictions on what kind of business will be considered for this loan (no BEE requirements, size or turnover requirements), other than the administrators of the fund must consider the business to be commercially viable and capable of repaying the loan.”
He said they had also proposed large additional budget allocations to funding the health response to Covid-19, including paying for a massive expansion of the testing, tracking and tracing programme.
“This should cost R10 billion, less than the cost of one day of ‘hard’ lockdown. This should also include extra budget allocation for healthcare workers’ overtime pay, face masks, ventilators, and hospital space expansion. Importantly, it would cost just R600 million to provide three free face masks to every South African who needs one. This is a small cost for the huge benefit of slowing down infections, and such a programme should definitely be announced.”
As a final point, he called on Ramaphosa to announce that government would seek financial assistance from international lenders such as the International Monetary Fund, the World Bank, and the New Development Bank.
“Especially where this funding is offered unconditionally, and with very low interest rates, it would be unforgivable not to make use of these offers. Indeed, South Africa is already late in applying to these funds for assistance, and should do so without delay. This is necessary, because the government simply does not have the money to fund these necessary interventions.”
He then touched on the DA’s primary and apparently only concern about what they hoped the country would not be hearing from the president on Tuesday evening.
They cautioned against any attempt to use Public Investment Corporation (PIC) funds to finance any economic bailout.
“Raiding the PIC, as proposed by Cosatu, to further delay application for funding from International Finance Institutions (IFIs) will not only be irresponsible but will also be illegal in terms of the PIC Act and its associated investment strategy. Any such attempt will be resisted strongly by the DA and all organisations concerned with the preservation of the pension funds of civil servants.
“The PIC has been hard hit by market losses in recent months. To force the PIC to sell out of those positions now would cement those losses and leave the state with a huge future liability.
“Any economic bailout should be financed through budget reprioritisation and external funding from IFIs.”
Hill-Lewis concluded that a comprehensive economic stimulus was not a matter that could be delayed.
“The country faces full-blown economic depression, not just recession, with devastating human consequences. We are already beginning to see the first signs of what these consequences will be, with South Africans beginning to go hungry.”
(Edited by Charles Cilliers)
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