10 interventions Ramaphosa announced in his R500bn socio-economic recovery plan
The unprecedented support package is the equivalent of 10% of the country's gross domestic product (GDP), Ramaphosa announced.
On Tuesday night, he revealed a broad range of measures to mitigate the worst effects of the Covid-19 pandemic on businesses, communities, and individuals.
Where will the money come from?
- R130 billion will be used from South Africa's existing Budget by reprioritising funds
- The rest will be secured through local sources such as the UIF and financing packages from global institutions such as the World Bank, Brics Bank and IMF
These are the 10 major interventions highlighted by Ramaphosa:
- R20 billion to fund health response
An amount of R20 billion will be directed to addressing the country's health efforts to address the pandemic.
This includes personal protective equipment (PPE) for health workers, increased screening and testing, additional beds in field hospitals, ventilators, medicine and staffing.
- R50 billion to boost social grants
Ramaphosa has allocated R50 billion to increasing social grants, including a new coronavirus grant.
Child grant beneficiaries will receive an extra R300 in May. 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.
In addition, a special Covid-19 Social Relief of Distress grant of R350 a month for the next six months will be paid to individuals who are currently unemployed and do not receive any other form of social grant or UIF payment.
- R100 billion for jobs
R100 billion will be set aside for the protection of jobs and to create jobs, the president has announced.
- R2 billion SMMEs and spaza owners
Ramaphosa says an additional amount of R2 billion will be made available to assist SMMEs and spaza shop owners and other small businesses.
- R40 billion for income support via UIF
R40 billion has been set aside for income support payments for workers whose employers are not able to pay their wages. through the UIF’s special COVID-19 benefit.
- R70 billion in tax relief
Ramaphosa announced a range of tax relief measures to help ease the pressure on businesses and individuals.
The government will be introducing a four-month holiday for companies’ skills development levy contributions, fast-tracking VAT refunds and a three-month delay for filing and first payment of carbon tax.
The 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%.
Businesses with a turnover of more than R100 million a year can apply directly to SARS on a case-by-case basis for deferrals of their tax payments.
Taxpayers who donate to the Solidarity Fund will be able to claim up to an additional 10% as a deduction from their taxable income.
- R20 billion for municipalities
An amount of 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.
- R200 billion loan scheme with major banks
Ramaphosa announced a R200 billion loan scheme, in partnership with major banks, the Treasury and SARS.
This will help businesses to pay salaries and suppliers. The scheme is open to companies with a turnover of less than R300 million a year.
- Distribution of 250 000 food parcels
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.
- Phased reopening of the economy
Ramphosa says the government will follow a risk-adjusted approach to the return of economic activity.
He says it's important to balance the continued need to limit the spread of the coronavirus with the need to get people back to work.
He'll be making an announcement about the phased reopening of the economy on Thursday evening.
Source : @PresidencyZA/Twitter