ANC plan to use UIF funds to bail out Eskom slated
Durban – AN ANC proposal to use surplus social security funds from the Unemployment Insurance Fund (UIF) and Workmen’s Compensation Fund to bail out Eskom and support socio-economic development is potentially unlawful and a “brutal attack on workers”.
This was among the views of analysts, political parties and trade unions yesterday who criticised the proposal presented in the ANC’s latest discussion document entitled “Umrabulo Special Edition” .
In the 220-page document, the ANC notes tsocial security funds had “accumulated large surpluses equal in 2019 to R160 billion at the UIF and R65 billion at the Compensation Fund”.
“These resources effectively derived from legally mandated savings by workers and employers. They were, however, invested almost exclusively in listed companies and government bonds, rather than promoting economic reconstruction,” the document said.
Elsewhere in the document the ANC states that “Business and labour would agree that social security funds could be tapped, responsibly, to address social and economic needs, in particular to deal with Eskom, promote small business, provide industrial financing, upgrade basic education in poor communities and increase incomes for the working poor. They may also be needed to deal with the likely coronavirus outbreak.”
However, South African Federation of Trade Unions deputy secretary general Moleko Phakedi said the proposal would be turned down by workers.
“We reject that with the contempt it deserves. It is misplaced and I don’t think it is going to go down well with workers. I can tell you the workers will reject this – both employed workers and the unemployed. UIF is workers’ money,” Phakedi said.
Phakedi said the proposal suggested that workers’ money should be used to provide basic service delivery like schools and hospitals which the state was responsible to provide.
“Bailing out Eskom will be to put the money with fat cats and big executives,” he said.
Phakedi said the union would lobby Cosatu and Nactu to reject the proposal.
Cosatu spokesperson Sizwe Pamla said the union had appointed a political commission to review the report before it formulated its position.
However, he said the ANC could not be trusted to implement policies.
“There are many comprehensive issues (in the report) but it is an organisation that has failed to consult workers. Some of them are policies Cosatu would have pursued but we have an ANC administration that is dysfunctional at all levels so it is very difficult to trust them with those issues.
“The levels of mismanagement are from local and provincial government to SOEs. The proposals might be familiar to us but the organisation might be too discredited to be trusted to implement,” Pamla said.
Political analyst Ralph Mathekga said the proposal was “a veiled justification for prescribed assets” and it was unclear whether the intention was to simply funnel funds to Eskom or to buy a debt instrument to balance the books.
“The public fiscus is exposed severely because of state-owned entities – the manner in which they are structured, the way in which they are run and, ultimately, the fiscal burden they bring,” Mathekga said.
He said the funds would be placed “in a very risky area” if they were transferred to Eskom in its current state because the government was not prepared to do the “deeper work” of fixing the state-owned entity.
DA spokesperson on labour Michael Bagraim said the proposal was “disgusting” and possibly unlawful.
“The money does not belong to the government, it belongs to the employees of SA, and now you are using someone else’s money to bail out Eskom. The government puts nothing in – the employee puts in 1% and the employer puts in 1% every month. People religiously pay knowing it’s there for a rainy day,” he said.
IFP president Velenkosini Hlabisa said his party did not support the initiative. “The money from UIF should be concentrated on assisting people who lost jobs during the Covid-19 period as well as those who are suffering due to unemployment. ”