LIFESTYLE - With the prospects of a very deep economic recession that will cause businesses to close and many people to lose their jobs, government has actioned a few plans to help businesses in this time.
"OUR country finds itself confronted not only by a virus that has infected more than a quarter of a million people across the globe but also by the prospects of a very deep economic recession that will cause businesses to close and many people to lose their jobs."
These were the words of President Cyril Ramaphosa as he addressed business matters during his announcement that South Africa would enter a lockdown until midnight on Thursday, April 16.
All shops and businesses are closed, except for pharmacies, laboratories, banks, essential financial and payment services, including the JSE, supermarkets, petrol stations and health care providers.
Ramaphosa outlined a set of interventions to “help to cushion our society from these economic difficulties”.
Here’s a look at some of the measures set out to help businesses.
Support for people whose livelihoods will be affected:
Government is in consultation on a proposal for a special dispensation for companies that are in distress because of Covid-19. Through this proposal, employees will receive wage payment through the Temporary Employee Relief Scheme, which will enable companies to pay employees directly during this period and avoid retrenchment.
Any employee who falls ill through exposure at their workplace will be paid through the Compensation Fund.
Government will use the reserves within the UIF system to extend support to those workers in SMEs and other vulnerable firms who are faced with loss of income and whose companies are unable to provide support.
Assisting businesses that may be in distress:
Using the tax system, government will provide a tax subsidy of up to R500 per month for the next four months for those private sector employees earning below R6 500 under the Employment Tax Incentive. This will help over four million workers.
The Department of Small Business Development has made over R500 million available immediately to assist small and medium enterprises that are in distress through a simplified application process.
The Industrial Development Corporation has put a package together with the Department of Trade, Industry and Competition of more than R3 billion for industrial funding to address the situation of vulnerable firms.
The Department of Tourism has made an additional R200 million available to assist SMEs in the tourism and hospitality sector who are under particular stress due to the new travel restrictions.
More information on the lockdown via Facebook: The Presidency of The Republic of South Africa. The Department of Small Business Development help line is 0860 663 7867. The Industrial Development Corporation can be reached via 011 269 3888 / 0860 693 888.