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Pandemic causes crisis after crisis for South Africa’s economy

(Adjustment budget debate in parliament: Department of Employment and Labour)

The Covid-19 pandemic has caused crisis after crisis for the South African economy and has brought about a staggering three million job losses during the national lockdown. And that was on top of an economy that was already on its knees even before the national lockdown with an unemployment rate of 30,1%.

The country was already in a place where it could not afford greater unemployment and, therefore, the three million job losses are nothing short of a disaster. The harsh reality is that there are now thee million more households with no income that are facing the unpleasant prospect of having to find a job in a contracting economy.

There is no doubt that South Africa is headed for an enormous labour crisis. The country can forget all about President Cyril Ramaphosa's plan to create 275 000 job opportunities per year. For now, the focus should be on preventing any further job losses and on stimulating the economy in order to create an environment that is conducive to job creation.

This can, however, not be done while the government has its priorities all wrong – at present, government policy is so biased that it seems more like a declaration of war against some of its own citizens.

The private sector is the biggest provider of jobs in South Africa, but it also appears to be the Minister of Labour's favourite scapegoat as it gets the blame for everything that goes wrong in the labour market. Even the President refuses to admit that this sector is vitally important.

In this challenging labour context, the Commission for Conciliation, Mediation and Arbitration (CCMA) plays a key role in resolving labour disputes and preventing unfair dismissals.

During June alone, 16 500 cases were reported to the Commission. Of these, 1 800 cases dealt with the dismissal of nearly 100 000 employees. And yet the budget of the programme under which this body falls has been cut back by R90 million.

Likewise for the budget of the Labour Inspectorate, which has been slashed with R48 million. The budget of the Public Employment Agency, the only body that can execute the government's mandate to create more jobs, has also been reduced by R50 million.

South Africa is becoming a welfare state as there are more people who are dependent on social grants than there are people who are working and earning an income and the situation is getting worse by the day.

It is not sustainable. And yet the budget for the Department that is responsible for job creation has been cut.

The government cannot lift people out of poverty by means of social grants. People have to work their way out of poverty and that can only happen when the economy flourishes, when small business enterprises are allowed to create jobs without restrictive and discriminatory legislation and when the private sector gets the support it needs from the government.

Contact details: 072 997 8315

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