Mashaba proposes measures to help solve SA’s economic crisis after Covid-19 lockdown

The People’s Dialogue leader Herman Mashaba has proposed measures to help fight the economic crisis during coronavirus (Covid-19) pandemic.

“Today I have called for steps to be taken to defeat the economic crisis that will certainly follow the health crisis posed by Covid-19.

“We cannot allow ourselves to ignore the fact the humanitarian crisis that will arise after we have emerged from our health crisis, when businesses do not re-open and wides-scale retrenchments follow,” Mashaba said in a statement on Wednesday.

Mashaba said the announcement that South Africa had been reduced to junk status was a reminder that the country could not afford to ignore what was coming.

“News on Friday last week that South Africa has been reduced to junk status by the last international ratings agency to hold us at investment grade is a stark reminder that we cannot afford to ignore what is coming,” he said.

The former DA official said a stimulus package needed to be put together as a matter of urgency to prevent the closing down of various industries and people losing their jobs.

“Government should finance this package by freezing unspent funds allocated to low-priority projects at local, provincial and national government levels and projects that cannot be completed due to the implications of the health crisis.”

Mashaba said the stimulus package should be equally funded by a drive to reduce the public sector wage bill by 25%.

“Any discomfort with this should be considered in light of two facts. Employees in the private sector, across the board, are facing salary cuts to ensure businesses survive in this time.

“Why should the public sector, funded by these same companies and private individuals, be any different? Furthermore, with our new found dependency on the IMF, one should assume this is going to be a requirement attached to any funding going forward.”

He said labour laws need to be relaxed across the spectrum as they had favoured the employed at the expense of the unemployed.

“Immediate legislation [and] relaxing the Labour Relations Act will encourage companies big and small to hire or retain more people. This would immediately reduce the impact of the bloodbath that is likely to follow the lockdown. I would go further to say that any company that does not retrench employees, or that continues to hire in the months that follow the lockdown, should be entitled to a tax rebate that [incentivises] them to retain staff.”

Mashaba further suggested that small and medium-sized businesses had to be be given access to very low-interest rate loans after the lockdown, which would allow them to recover from their loss of operations, and get back on their feet without having to retrench their workers.

He said the government should announce immediate plans to privatise the “ailing state-owned entities”.

“SAA should be sold, more like given away. Eskom should be privatised through a deal that contains annual cost increases for consumers.

“If the days of a state-owned entity being bailed out to the tune of tens of billions over the past decade made little sense before, it makes absolutely no sense in a post-Covid-19 world.”

The People’s Dialogue leader said provisions of three-month income grants should be made to informal traders and micro-enterprises who have lost access to their daily income during the lockdown.

“It is estimated that there are as many as 3 million people in our informal economy who are not covered by the UIF measures announced to date. These are people who support entire families and support upstream economies of small-scale food production. The day the Covid-19 lockdown began, these 3 million people started an income lockdown that leaves them starving and vulnerable.”

He urged the government to immediately reconfigure the country’s national budget.

“We cannot afford to operate under the business-as-usual budget adopted in February this year. The kind of financial reforms that are going to be necessary to attract investment and satisfy the IMF, will mean major reforms. These reforms are likely to be politically unpopular within the ANC and its tripartite alliance partners, but their discomfort means little to a nation paying the price for their politics over the past two decades.”

Mashaba said in addition to the proposed measures, serious steps needed to be taken against those who have looted the country.

“Our junk status does not arise from events of the last week, it arises from years of mismanagement and looting. A signal must be sent to the South African people, and the global community, that we are serious about prosecuting corruption.”

He said there was no question that the right steps had been taken to address Covid-19 pandemic, however, President Cyril Ramaphosa needed to demonstrate strength of leadership in protecting the country from the “economic crisis that is ahead”.

“We need strong leadership which defies the forces within the ANC and tripartite alliance, and takes the unpopular decisions that will be essential to ensure that we avoid emerging from this lockdown only to face an economic crisis that could last for years,” Mashaba concluded.

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