Covid-19: “A gradual and phased recovery of economic activity will be implemented” – Mmamoloko Kubayi-Ngubane
According to the minister, government has sequenced and phased in key sectors and priority areas with a view to deepening the fight against Covid-19 whilst rebuilding the economy.
Ministers who serve on the National Coronavirus Command Council elaborated on the socio-economic relief interventions on Covid-19 and the strengthening of the performance of the economy under the current conditions at a media briefing today (28 April).
According to Minister of Tourism Mmamoloko Kubayi-Ngubane, beyond April 30, government has decided on a gradual and phased recovery of economic activity which will be implemented through a deliberate and cautious approach to the easing of lockdown restrictions associated with the current level 5 classification.
“In undertaking the risk adjusted approach, we have sequenced and phased in key sectors and priority areas with a view to deepening the fight against Covid-19 whilst rebuilding our economy. It will affect key economic sectors and drivers as well as promote human development and well-being,” she said.
“It had been expected that in some cases, a sector would not be able to return to full production during level 4 or even at lower levels while the risk of infection remains.”
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Also, if government does not coordinate the response, she said, there is a risk of more job losses and the contracting of the economy to unprecedented levels.
“This plan spans six to eight months because we believe that the curve peak will probably arrive in September 2020,” said Minister Kubayi-Ngubane.
Following President Cyril Rampahosa’s address on 21 April 2020, the National Treasury issued a second set of measures aimed at assisting individuals and businesses through the economic hardships brought by the pandemic.
These measures consist of fiscal and support instruments to help the economy overcome the severe impact on production, markets, trade and employment.
The interventions include:
• Skills development levy holiday.
• Fast-tracking of value-added tax (VAT) refunds.
• Three-month deferral for filing and first payment of carbon tax liabilities.
• A deferral for the payment of excise taxes on alcoholic beverages and tobacco products.
• An increase in the expanded employment tax incentive amount.
• An increase in the proportion of tax to be deferred and in the gross income threshold for automatic tax deferrals.
• Increasing the deduction available for donations to the Solidarity Fund.
• Adjusting pay-as-you-earn for donations made through the employer.
• Expanding access to living annuity funds.
• Further support for firms will come from a R200 billion loan scheme for small and medium-sized businesses. The National Treasury is finalising the details and it should be ready by the end of this week.
Minister Kubayi-Ngubane also spoke on measures in various sectors – mining, tourism, labour and employment (including Covid-19 relief benefits to workers and Small, Medium and Micro Enterprise (SMMEs)
In mining, a directive has been issued to all operations to ensure safe start-up procedures as the sector prepares to ramp up to 50% of capacity. It also encourages employers to systematically phase in workers.
However, in the tourism sector the processing of applications for the Covid-19 R200 million Tourism Relief Fund is on hold after the department was served with court papers by both AfriForum and Solidarity in an attempt to set aside the scheme on grounds of its transformational characteristics as it upholds the Broad Based Black Economic Empowerment Act. With 10,000 applications being made, the department will be guided by the court ruling.
In the labour and employment sector, some 10,000 Unemployment Insurance Fund (UIF) applications could not be processed due to errors, one being incorrect banking details. The UIF call centre has also increased capacity from 75 agents to 400 agents operating the toll-free number 0800 030 007. To date, some R3.3 billion has been paid to employers through the relief fund.
Under the SMME sector, the Department of Small Business Development has approved over R235 million of the R530 million set aside in Covid-19 relief measures to support payroll, rentals and utilities over 3 months.
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