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Practicality of “extra-ordinary” coronavirus budget questioned

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A shadow of doubt has been cast over President Cyril Ramphosa’s announcement of historic economic relief and support interventions. Although the R500billion endeavour has been widely welcomed, local organisations have questioned whether the portion dedicated to helping vulnerable families will be enough.

Dozens of arrests have taken place over the past three weeks as several shops and goods trucks have been looted across the country. Governments extension of the nationwide COVID-19 lockdown had further frustrated civilians eager to get back to work in order to make ends meet.

However, the number of confirmed coronavirus cases has been increasing in excess of 95 daily for the past week, raising concerns that the lockdown will be extended. Ministers have been attempting a balancing act between containing the virus, which has killed 58 people and protecting the economy from collapsing.

Ramaphosa announced that as part of Phase 2 in government’s strategy to sustain South Africa, all stakeholders were consulted with and agreed that funding needs to be ploughed into four key areas, namely:

  1. The health budget; to treat and contain positive patients
  2. Relief of hunger and social distress; to alleviate tension in poverty-stricken areas
  3. Support for companies and workers; to provide job security
  4. Phase re-opening of the economy; to promote sustainability and prevent collapse

Government has approached the World Bank, International Monetary Fund, BRICS New Development Bank and African Development Bank to procure the funds.

Speaking to VOC on Wednesday, co-founder and activist with the South African Food Sovereignty Campaign Prof Vishvas Satgar said the measures need to be contextualized.

Satgar explained that it is important to acknowledge that given the nature of how the pandemic is affecting South Africa, the ruling party and president is obligated to act in a manner that balances the socio-economic reality of the country.

“We went into this crisis as one of the most unequal societies in the world. Income distribution in the country is hideous. We have low wages, high unemployment -which is going to increase even more now.”

He expressed that governments across the globe have recognized the need to invest in the economy, while simultaneously addressing the health crisis. According to Satgar, the measures that were announced “is not veering to the viability of society.”

The professor explained that their call for a basic income grant to be instituted in the country drew support from informal traders, unemployed peoples’ movements, child movements and climate justice movements. Government has a constitutional mandate to ensure there is a comprehensive welfare system in place and, according to Satgar, “the ruling party has not delivered this.”

A total of R50 billion in relief has also been allocated to temporary coronavirus grants over six-month. This entails that the child support grant will be boosted with an extra R300 from May and in June-October, an extra R500. All other grant beneficiaries will get an additional R250 a month during the same period.

Technology will form part of this plan to issue food vouchers to the most vulnerable. The country’s grant system is reportedly one of the largest in the world and reaches 15 million people every month; including pensioners, mothers and people with disabilities.

A special COVID-19 Social Relief of Distress grant of R350 will be paid to individuals who are currently unemployed and don’t receive any other form of social grant or UIF payment. Details, Ramaphosa said, would be announced by Finance Minister Tito Mboweni in due course.

Satgar said the basis for their grant is now being laid for that but expects that “it is going to be an administrative nightmare” and won’t be able to provide the immediate relief that is needed.

He warned that attempting to get all the unemployed onto a national register could take months. He added that the verification of details such as who is unemployed and who is in the informal sector will bureaucratize the process and cause a massive blockage.

“The “top-up” will take (grants) to about R1000 (…) it’s welcomed relief at one level, but the basic basket of goods in South Africa right now is over R3000. It’s still below what is sufficient and necessary, the pain and the screams will still be there.”

“To survive? R350 is really not a lot of money and is also going to come short.”

Muhammad Cajee from the SA Muslim COVID-19 Response Task Team, which is a coalition of ulama formations, civil society and humanitarian organisations,  shared the sentiment. He explained that there are many logistics involved in their daily operations such as obtaining goods, packaging them and then distributing it.

Their operations require both funding and manpower and expose volunteers to the risk of catching the virus, or occasionally being greeted with violence. NGO’s deliver items such as staple foods, non-perishables, water, essential hygiene and household products and hot meals such as soup or akhni.

“Many NGOs are working to provide (items) and the message has continued to come through that it’s not sufficient. What everyone’s been advocating for has been the need for cash transfers into the hands of people as the easiest and most cost-effective way of doing it,” he said.

Prof Satgar questioned the Unemployment Insurance Fund (UIF) and its accessibility. He said that UIF is usually 40-60% of an employee’s salary and is usually negotiated with the company.   he cited an “information and reach gap” and that it remains unclear if benefits will be increased.

Satgar cited Southern African Clothing and Textile Workers Union (SACTWU)’s efforts to negotiate with government on behalf of the industry, where they were able to “lock a particular agreement” which would benefit the sector. He explained however that other businesses, including SMME’s and others, may not have the same bargaining power.

Experts the world over have warned that the poor would bear the brunt of the COVID-19 pandemic.

“To fill the immediate need, the Department of Social Development has partnered with the Solidarity Fund, NGOs and community-based organisations to distribute 250,000 food parcels across the country over the next two weeks,” announced Ramaphosa.

Satgar described this as “wholly inadequate” and expressed disappointment that the president “hasn’t come out to unlocking the food columns” such as micro-scale farms, community gardens, small scale farmers and subsistence fishers which will collectively feed thousands of households.

Meanwhile, Cajee and the SA Muslim COVID-19 Response Task Team quantified the amount brought in from the Muslim community at about R55 million since the start of lockdown. Although he expressed deep gratitude for how active the Muslim community has been, but that more is needed in terms of funding and active citizenship.

“Individuals and members of the Muslim community need to think about what skills they have and what they can contribute to the wider community, especially on the ground in their own community.

“We want to see a people-driven approach to food roll-out. We want lots of NGO’s rising to the challenge…they’re ready to move. We have a crisis in the country right now of a magnitude of about 30 million people that are food insecure. There’s got to be much more mobilization of the capacity on the ground from civil society,” added Satgar.

The president is expected to address the nation again on Thursday 23 April 2020.

VOC


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