In what was arguably the second most anticipated live appearance by the president, Cyril Ramaphosa addressed the nation last night (Thursday evening) to affirm the fears of an entire nation. “If we end the lock down too soon and too abruptly, we risk reversing the gains we have made over the last weeks… After careful consideration of the available evidence, the National Coronavirus Command Council has decided to extend the nationwide lockdown by a further two weeks beyond the initial 21 days.”
That precise moment will undoubtedly be recognized by future generations as the day the SMME suffered cardiac arrest. Many small and medium business owners in the formal sector are more than just a little concerned about the effects that the lock down, which has now been extended by another two weeks, will have on what remains of their now fast-depleting financial reserves. Many lodges, pubs and restaurants rely on the spend of daily guests to their establishments. As a result of the complete shutdown of the restaurant industry, many local restaurateurs have had to lay off their entire staff contingent – adding to the already worrisome unemployment figure which was at 29% before the lock down.
Though there have been many platforms created by government to assist the SMME owner to minimize the effect of this lock down and perhaps even rescue their businesses from bankruptcy, the red tape surrounding applications and the uncertainty of who exactly qualifies for the bailouts have steered many away from the olive branch.
In his speech, Ramaphosa made mention of the Unemployment Insurance Fund (UIF) which has already paid out R356 million of the R40 billion set aside for the lock down. He also mentioned that the Industrial Development Corporation (IDC) has set aside R3 billion for the procurement of essential medical supplies and that it has already approved R130 million in funding – and expects to approve a further R400 million in the coming week – to companies who applied for funding under this special facility.
The Small Enterprise Finance Agency has approved the postponement of loan repayments for a period of 6 months. Government has reprioritised R1.2 billion to provide relief to smallholder farmers and to contribute to the security of food supply. In addition to these expenditure measures, the Reserve Bank has also lowered interest rates and has taken measures to inject liquidity into the economy.
“I am pleased to report that the Solidarity Fund – which was established to mobilise resources from companies, organisations and individuals to combat the coronavirus pandemic – has so far raised around R2.2 billion,” he added. “It has already allocated around R1 billion to buy sterile gloves, face shields, surgical masks, test kits and ventilators. It will also allocate funds for humanitarian relief to vulnerable households, in addition to the R400 million set aside by government for Social Relief of Distress grants.”
In one of the most favoured announcements, the president said that himself, the deputy president, ministers and deputy ministers would each take a one-third cut in their salaries over the next three months which would be donated to the solidarity fund.
The highest paid members of the national assembly are the speaker of the national assembly and the chairperson of provinces who each earn R2 825 470 annually – the same as the salary of the deputy president. Cabinet ministers are paid R2 401 633 a year and the national assembly’s deputy speaker earns R1,977,795 a year. Following these salaries are the house chairperson who receives an annual pay check of R1 882 488, senior members of parliament who each receive R1 600 467 per year and parliamentary committee chairs who each receive R1 495 755 annually. Leaders of minority parties earn R1 346 232 a year and the lowest salary an MP in the national assembly or NCOP earns is R1 137 933 a year. You would be forgiven for questioning what exactly these salaries are for…
In addition to these enviable incomes, South Africa’s members of parliament also receive a few “perks” of the job. The include 88 single journeys a year (by air, train, bus or car), daily commuting, travel to and from airports, parking at airports, relocation, travel for their dependants, tools of trade including a cell phone, tablet and laptop, equipment and furniture for their offices, stationery, personal accident insurance, accommodation in parliamentary villages (three complexes in Cape Town that house MPs when parliament is in session) and transport from these villages to parliament.
Will the third of their salaries they “donate” presumably involuntarily, to the solidarity fund, include a complete halt to their perks? Will the people we see bickering on our television screens be forced to endure the lockdown with the rest of the country? There are currently 400 members in the South African national assembly. That means that 400 individuals each earn more than the average small business in this country. According to a recent online report released by South Africa Facts, the average general surgeon in South Africa an annual salary of R565 865 – a little more than a third of the salary of a senior member of parliament.
The president said nothing in his speech about any plans to assist the education sector which should be on the list of priorities given that the country’s grade 12 students will now be gearing up for the final senior exam. How will this lock down affect the future of the class of 2020? We do not know.
Ramaphosa’s attempt to motivate his countrymen in his closing statement will do little to lift the spirits of those facing financial duress as all of us now enter unchartered territory. “As we walk this road together, as we struggle to defeat this pandemic, we remain strong and united and resolved. Much is being asked of you, far more than should ever be asked. But we know that this is a matter of survival, and we dare not fail.” Mister President, when the time comes, will we as South Africans have the freedom to ask of you and your cabinet, the same?