The ANC has proposed using state-run unemployment and compensation fund surpluses to help rescue Eskom, raising the ire of labour unions.
In discussion documents released late last week, the ANC said the Unemployment Insurance Fund and the Compensation Fund had combined surpluses of R225-billion in 2019. Instead of investing this in listed companies and government bonds it should instead be used for “economic reconstruction”, the party said. Eskom has debt of R484-billion.
“Business and labour would agree that social security funds could be tapped responsibly to address social and economic needs, in particular to deal with Eskom,” the ANC said. It also said the funds could be used to help finance industry and improve education.
The proposal, which ties in with earlier calls to use civil servants’ pension funds to reduce Eskom’s debt, has encountered opposition from labour unions, which are key allies of the ANC and have criticised the government for mismanagement and corruption at the utility.
“The focus of the UIF at this juncture has to be on availing every resource that it can to assist the millions of workers who have lost wages and jobs” as a result of the coronavirus, trade union federation Cosatu said in a response to queries. “It cannot afford to continue to carry the nation on its shoulders alone.”
The 1.8 million-member union federation, South Africa’s biggest labour group, has called for more assistance from commercial banks to boost the stagnant economy and help Eskom rather than a reliance solely on workers’ contributions. “It is critical that workers determine where their funds are invested,” Cosatu said.
The UIF has used some of its surplus to compensate workers who lost their jobs as a result of the impact of the virus outbreak.
Business Day reported on the ANC proposal earlier. — Reported by Antony Sguazzin, (c) 2020 Bloomberg LP