Billion Rand Bonanza

By Staff Writer

The recession is biting and the government is reacting. President Jacob Zuma recently announced a 2.4 billion Rand fund to help us get through. The money is going to be targeted to a training allowance and will be taken from the budget of the national skills fund and the UIF. Bailouts have been the order of the day internationally to deal with the financial crisis but instead of just chucking money at dubious companies, this bailout is intended to protect workers. So what will it entail?

 

  • Training allowance of 50% salary
  • Not a way to nationalise debt
  • Reskill workers in under pressure industries

 

In the US a large part of the Obama bailout is unaccounted for. Many companies have essentially had their debt written off by tax payer's monies. There has been some dissatisfaction about this. With the Zuma scheme, however rather than writing off debt, companies that are under pressure will have the ability to place workers that they would otherwise have had to retrench into a training scheme under half pay. This may be tough on workers but it is better than no pay and joining the mass ranks of unemployed. The upshot is that the relief will allow companies to weather the recession and have better skilled workers after.

As always the details are where it will stick and the government is expected to release details on how it will work in practise soon. There is of course the danger that companies may place workers in the 'training' programme pay them 50% wages from the government then keep them working on their regular jobs without the benefit of the training programme. This would be a short sighted approach as the programme could be of major benefit to the South African economy in the longer term. The economy is under strain and investment should be in strengthening employment and skills. This programme is a measured response and if implemented correctly could place us at the forefront of the global economic recovery next year.

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