Government is shaking up a cocktail of unemployment, skills and incentive funding to ward off the worst of the current recession.
President Jacob Zuma this week gave some details about an initial tranche of funding from the Unemployment Insurance Fund (UIF), which will provide R2.4-billion to pay workers while they are retrained using skills development funds from the sector education and training authorities (Setas).
This programme is intended to equip workers who are threatened with retrenchment to get new skills. Additional funds from incentive schemes controlled by the department of trade and industry are expected to go towards support for the automotive sector and a rescue package for the clothing and textiles sector.
Further details of these packages are expected within the next two weeks. The funding is intended to assist the economy weather the global crisis. While further discussions are due to take place some detail still appears unclear.
The rescue plan comes out of discussions held through National Economic Development and Labour Council, which developed the Framework Response to the Economic Crisis.†A national job fund will be created to house the R2.4-billion, drawing funding from the National Skills Fund and the UIF.
The plan will entail the temporary suspension of workers for training purposes. The fund will pay a training allowance to workers at 50% of the basic wage, to a maximum of R6239 a month.
The Setas will then fund payment of the training, said Alan Hirsch, deputy head of policy coordination and advisory services in the presidency. While employees will effectively be receiving half their salary, employers will be expected to continue paying basic contributions such as to retirement annuity funds.
The scheme extends to businesses in all sectors. Training funds will be allocated depending on what the individual Setas have available.
Hirsch said that where one Seta may be oversubscribed, plans are being discussed to allow other Setas with surplus funds to transfer these to their counterparts. If the maximum disbursements were used they could help retrain and potentially sustain more than 400 000 workers.
Hirsch said, however, that the success of the programme will depend on how well it is taken up by companies, although government does not believe that employers will not access the programme. ‘We want to save as many jobs as possible,†said Hirsch.
According to StatsSA South Africa has more than four million unemployed people, with another 1.5-million discouraged work seekers.Only workers in ‘defined circumstances†who earn up to R180 000 a year (or R15 000 a month) will qualify.
In certain instances, said Hirsch, the programme will extend to workers currently on short time. The Commission for Conciliation, Mediation and Arbitration (CCMA) has been called on to help trade unions and employers to structure agreements for the variation of existing employment contracts to enable the training of laid-off workers.
The Industrial Development Corporation has also set aside R6-billion over the next two years to help support companies which have problems coping with the crisis.
During April the department of trade and industry released a proposed rescue package that would help the clothing and textiles sector to survive the crisis. These include trade measures to raise applied tariff rates on clothing imports to bound levels of 45%.
The trade measures, however, have been called into question by observers, sparking fears that South Africa is becoming increasingly protectionist.
Funding for the rescue package is likely to come from existing incentives programmes within the trade and industry department.
A further announcement is expected at the end of August. Stewart Jennings, president of the National Association of Automotive Component and Allied Manufacturers, said the intervention was ‘too little, too lateâ€.
While he welcomed the funds set aside for retraining, he said South Africa lacked a ‘comprehensive economic vision†that would make the country competitive and create jobs.
Labour representatives have criticised the delay in delivering the plan. In addition, investigations by the Competition Commission into the food supply chain, including bread, milling, dairy, poultry, fats and oils, fertilisers and supermarkets, is expected to help cushion the negative effects of higher food prices. T
he National Debt Mediation Association, a business initiative to assist indebted consumers, has been established to provide rules, standards and processes to address debt restructuring.
