What you need to know about SA’s R500bn Covid-19 support package

Government has set aside R500 billion to implement measures which can bolster the economy and assist the most vulnerable citizens during the Covid-19 coronavirus outbreak, President Cyril Ramaphosa announced on Tuesday night.

The funds will be used to implement an extraordinary health budget to respond to Covid-19, ensure relief of hunger and social distress, support companies and workers and map out the gradual re-opening of the economy.

“We are now embarking on the second phase of our economic response to stabilise the economy, address the extreme decline in supply and demand and protect jobs. As part of this phase, we are announcing this evening a massive social relief and economic support package of R500 billion, which amounts to around 10% of GDP,” Ramaphosa said.

Here’s everything you need to know about the government’s plan to deal with the social and economic impact of the Covid-19 pandemic:

• R20 billion will be directed to improve efforts to address the pandemic. This includes additional expenditure on personal protective equipment for health workers, community screening, an increase in testing capacity, additional beds in field hospitals, ventilators, medicine and staffing.

• R20 billion will be made available to municipalities for the provision of emergency water supply, increased sanitisation of public transport and facilities, and providing food and shelter for the homeless.

• To reach the most vulnerable families in the country, the government has decided on a temporary 6-month coronavirus grant.

• Child support grant beneficiaries will receive an additional R300 in May and from June to October they will receive an additional R500 each month. All other grant beneficiaries will receive an extra R250 per month for the next six months.

• A special Covid-19 social relief of distress grant of R350 a month for the next 6 months will be paid to those who are unemployed and do not receive any other form of social grant or UIF payment.

• To ensure that food is distributed accordingly and without any foul play, the SA Social Security Agency (Sassa) will implement a technology-based solution to roll out food assistance through vouchers and cash transfers. 

The Department of Social Development has partnered with the Solidarity Fund, NGOs and community-based organisations to distribute 250 000 food parcels across the country over the next two weeks. 

The president yet again condemned reports that officials on the ground were involved in the looting of food parcels and warned that government would not hesitate to ensure that those involved in such activities face the full might of the law. 

This past weekend City Press reported on the alleged incidents of corruption and food looting in eight provinces.

Officials, mostly from the ANC, have been accused of giving the food to their families and not those who are most needy. 

Read: Councillors accused of looting food parcels meant for the poor

• R100 billion will be set aside for protection of jobs and to create jobs. And R40 billion has been set aside for income support payments for workers whose employers are not able to pay their wages.

• An additional R2 billion will be made available to assist small and medium enterprises and spaza shop owners and other small businesses.

• The government will be introducing a R200 billion loan guarantee scheme to assist enterprises with operational costs, such as salaries, rent and the payment of suppliers. In the initial phase, companies with a turnover of less than R300 million a year will be eligible.

• There will be a 4-month holiday for companies’ skills development levy contributions, VAT refunds will be fast-tracked and there will be a 3-month delay for filing and first payment of carbon tax.

• The previous turnover threshold for tax deferrals is being increased to R100 million a year, and the proportion of PAYE payment that can be deferred will be increased to 35 percent.

• Businesses with a turnover of more than R100 million a year can apply directly to the SA Revenue Service on a case-by-case basis for deferrals of their tax payments.

The lockdown is supposed to come to an end next week and this is when government will gradually start announcing which economic activities will be allowed.

“We will follow a risk-adjusted approach to the return of economic activity, balancing the continued need to limit the spread of the coronavirus with the need to get people back to work. As I have said previously, if we end the lockdown too soon or too abruptly, we risk a massive and uncontrollable resurgence of the disease,” Ramaphosa said.

The president explained that the first stage of the plan to curb Covid-19 began in mid-March pandemic was declared as a national disaster.

“This included a broad range of measures to mitigate the worst effects of the pandemic on businesses, on communities and on individuals. The measures included tax relief, the release of disaster relief funds, emergency procurement, wage support through the and funding to small businesses,” he said.

The third phase is the economic strategy we will implement to drive the recovery of our economy as the country emerges from this pandemic.

Ramaphosa said he would address the nation again on Thursday.

Queenin Masaubi Political journalist | City Press

+27 11 713 9001 Queenin.Masuabi@citypress.co.za Media Park, 69 Kingsway Road, Auckland Park

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