/ 29 April 2009

DA slams government over company closures

Kobus Marais, who speaks for the Democratic Alliance (DA) on finance, has castigated the government for its failure to act to prevent companies going into liquidation, thereby throwing people out of work.

A total of 495 companies and 513 close corporations went into insolvency during the first quarter of this year, Marais said on Wednesday.

“Job insecurity and shrinking disposable incomes have slowed down consumer spending and as a result the manufacturing, finance, real estate and retail sectors have been hit particularly hard,” he said.

“The DA believes that the state should provide immediate relief through the tax system by offering wage subsidies and refunding companies’ expenditure on skills training for their employees. This will reduce the cost of doing business in this economy as well as increasing the returns on labour.”

Marais said that it is simply unacceptable that the extent of this government’s efforts to avert job losses have been the broad and vague Nedlac (National Economic Development and Labour Council) consultations, which after breaking deadline after deadline are yet to bear any fruitful and implementable plan.

“The ANC government is stuck in a state of policy inertia,” he said, “despite the South African economy experiencing its first recession since 1992. Since last year, the DA has been calling on the state to take action in order to avert a job loss meltdown. Yesterday Statistics South Africa announced that liquidations have increased by 46% year on year. When companies close, jobs are lost.”

He called on the incoming government to provide certainty about the direction of South Africa’s future economic policy. “The ANC must realise that irresponsible and populist decisions will place even more pressure on a job market already under severe strain,” he said. — I-Net Bridge