President Ramaphosa announces measures to support recovery of the economy

In his address this evening to update the country on the progress made in tackling the coronavirus pandemic, President Cyril Ramaphosa also announce a range of measures to support the recovery of the economy that has been negatively impacted not only by COVID-19, but also by the unrest and looting that recently hit KZN and Gauteng. These measures are intended to provide relief to the poor and to those who are vulnerable as a result of the measures that had to be imposed to deal with COVID-19.

“To support those who have no means of supporting themselves, we are reinstating the Social Relief of Distress Grant to provide a monthly payment of R350 until the end of March 2022,” Ramaphosa said. He added that this has been made possible by the slight improvement SA has seen in its revenue collection.

Government is also expanding the number of people who are eligible for this grant by allowing unemployed caregivers who currently receive a Child Support Grant to apply. 

Details on the reinstatement of the grant, including the process for application, will be announced shortly.

“This will build on the strength of our existing social protection system, which is one of the greatest achievements of our democracy,” Ramaphosa stated.

In addition to the food relief being provided by the Department of Social Development, government is contributing R400 million to the Humanitarian Crisis Relief Fund established by the Solidarity Fund to assist with the immediate needs of affected communities.

“We are also implementing measures to help businesses to rebuild,” Ramaphosa said.

“The most immediate need is to ensure that those businesses that were damaged or looted are able to rebuild and reopen as quickly as possible.

“We are one of the few countries in the world to have a state-owned insurance company, SASRIA, which provides cover against incidents of public violence, strikes, riots and unrest.”

The president confirmed that businesses that are insured will be covered by SASRIA. 

“SASRIA has committed to expedite the payment of all valid claims, and is working together with private insurers to ensure that assessments are completed without delay.

“Government will ensure that SASRIA is able to honour all of its obligations and will provide whatever support is necessary in this regard.”

Ramaphosa added that some businesses that were victims of the violence may not have been insured.

“This includes many small and medium-sized businesses, whether formal or informal. Many of these businesses have lost everything, and will not be able to rebuild on their own. We will not abandon them in their time of need.

“We are therefore working to extend support to uninsured businesses that were affected by the violence. Government will set aside dedicated funds for this purpose and we will soon announce a mechanism for these businesses to apply for support.

The president said that government will also be reprioritising funding for SMMEs affected by the pandemic through a once-off business survival funding mechanism.

“We are also working with large business to determine their contribution to the support of SMMEs, job creation and eradication of hunger and poverty.

“Two weeks ago, we announced that the COVID-19 TERS scheme would be extended for those sectors which were affected by Alert Level 4 restrictions during the past 28 days. Applications for this period are open, and the UIF will facilitate payments as quickly as possible to support workers who have not received an income.’

Ramaphosa added that most importantly, the UIF will provide income support to all those employees who have lost jobs as a result of the recent unrest.

“This will ensure that jobs are protected and that workers can continue to earn an income as those businesses take time to rebuild.”

While the TERS scheme has provided crucial support for many sectors that have been unable to operate, there is a need to provide even further relief to help businesses to recover, Ramaphosa told South Africans.

“We are therefore expanding the Employment Tax Incentive for a period of four months to include any employee earning below R6 500 and to increase the incentive amount by up to R750 per month.

“This will encourage employers to hire and retain employees, especially those in the retail and hospitality sectors which have been worst affected.

“We will also defer payment of PAYE taxes for a period of three months to provide businesses with additional cash flow, with an automatic deferral of 35 per cent of PAYE liabilities for employers with revenue below R100 million.”

He also announced that the payment of excise taxes by the alcohol sector will be deferred for a period of three months, to ease the burden on the sector as it recovers.

“These interventions are designed to extend as much relief as possible to individuals and businesses that are in need of support, without compromising our fiscal sustainability.

“No country can expect its economy to grow, or to live in peace and harmony, while many of its citizens remain marginalised, hungry and excluded.”

Ramaphosa said that the impact of recent events on SA’s economy has made the implementation of the Economic Reconstruction and Recovery Plan even more important.

“We have been working closely with our social partners on the further measures we will take to address poverty, accelerate the implementation of reforms, drive inclusive growth and create jobs. We will shortly be able to make further announcements in this regard.”

The president told South Africans that they have demonstrated to the world that the country is committed to democratic government, that it opposes violence and criminality, and that it will stand up to anyone who seeks to destabilise it.

“Our greatest strength lies in our Constitution, in the protection that it provides for our rights and freedoms, and in our open and democratic society. Our constitutional order has stood firm.

“As we move to rebuild our country from the effects of this violence and from the impact of this pandemic, let us do what our Constitution calls on us to do. We must continue to heal the divisions of the past and establish a society based on democratic values, social justice and fundamental human rights.”

The president concluded: “Let us all join hands to continue building the South Africa of our dreams despite the many challenges we face.”