Friday, August 7, 2009

R2.4bn to help weather recession in South Africa

Thursday, 06 August 2009

An amount of R2.4 billion will be placed in a national job fund to help employers and workers weather South Africa's recession, President Jacob Zuma said on Wednesday.

After a meeting with the "economic crisis response team" in Pretoria, Zuma said the resources would be drawn from the national skills fund and the unemployment insurance fund.

"This fund will be used to pay a training allowance to workers pegged at 50 percent of the basic wage or salary to a maximum of R6239 a month," Zuma told a press briefing.

Setting up a training lay-off scheme was one of the alternatives to retrenchment for workers and companies affected by the recession. The scheme would entail temporarily taking someone out of their work to train them.

"It will be launched in September 2009 and will be applicable to workers in defined circumstances earning up to R180,000 per annum."

The maximum period for a training lay-off would be capped at three months.

Economic Development Minister Ebrahim Patel said applications would be administered by the Commission for Conciliation, Mediation and Arbitration.

There would also be rules guiding the granting of training lay-offs.

Possible training activities would be in line with the person's current employment. This was to enhance their skills once they returned to work.

The government would encourage training in information communication and technology, as well as basic literacy and numeracy.

According to Zuma: "While significant technical work has been done and important progress made, implementation needs to be speeded up so that the effects of this work will begin to be felt by the population."

Congress of SA Trade Unions secretary-general Zwelinzima Vavi, who represents organised labour in the response team, said he was working with the business sector to put plans in place so that lay-offs would not be abused.

"It's not the normal way of dealing with the economy [its ups and downs] but the crisis has emerged. These are extraordinary circumstances."

A plan to be unveiled within the next two weeks would outline the rules of the lay-off as well as deal with high bonuses executives received.

Other steps to deal with the recession included strengthening the South African Revenue Service's ability to address customs fraud, which had led to many job losses, helping distressed businesses in the automotive sector and a rescue package for the clothing and textiles industry.

There would also be increased incentives for the manufacture of capital and transport equipment and fabricated metal products linked to the infrastructure development programme. The government also intended making payments to small, medium and micro enterprises and other businesses within 30 days.

The Industrial Development Corporation had also made R6 billion available over the next two years to respond directly to the crisis.

A significant portion of the current year's allocation had been committed to help firms struggling financially.

The National Debt Mediation Association, a business initiative to help indebted consumers, had been established to provide rules, standards and processes to help debt restructuring.

Zuma also said within the government, a new "integrated approach" to implementing the plan had emerged and included the departments of finance, labour, economic development and trade and industry.

"The important thing to remember is that work is being undertaken by all social partners in consultation. Not only are these partners part of developing our response to this crisis. They are also each responsible for implementing it," he said.

Source: Sapa