A lockdown extension will create an economic disaster

Issued by John Steenhuisen MP – Leader of the Democratic Alliance
09 Apr 2020 in News

Please find attached soundbite from John Steenhuisen MP.

The Democratic Alliance (DA) notes the intention of President Cyril Ramaphosa and his cabinet to extend the nationwide lockdown until late April to curb the spread of the Covid-19 virus in South Africa.

We would prefer a gradual phasing out of the current lockdown over the coming weeks as opposed to a continuation of the severe and economically-crippling regulations we currently see.

Our great concern is that President Ramaphosa has justified this extension as if we face a binary choice between health concerns and economic concerns.

We believe it is a great mistake to think in terms of lives versus livelihoods. This is a false dilemma. Rather, the difficult trade-offs to be made are between lives lost or damaged by Covid-19, and lives lost or damaged by the drastic measures to contain its spread.

We need to understand that we have limited resources and that we need to make difficult decisions taking into account both seen and unseen costs. This is the role of government: to make tough choices for the greater good for the greater number, while not forgetting that behind every statistic is a human story.

Each death resulting from the virus is a tragedy. But so is each death resulting from caged citizens and frustrated law enforcers, and so is each victim of home violence. And each malnourished child. And each newly unemployed South African.

The absence of empirical data and modelling makes it very difficult to simply agree that a lockdown extension may be an effective means to curb the spread of Covid-19. The resulting economic fallout now means that it is not only lives which are threatened by the virus, but livelihoods by our economic and financial collapse as a result of further lockdown regulations.

Decisions made at this level, and which have such dire repercussions on the economic wellbeing of South Africa, must be rooted in scientific research, and pragmatic policy positions. It is essential therefore that government clearly shares with South Africans accurate data, as well as the exact empirical metrics that success, or otherwise, will be measured against, and that will determine the end of the lockdown period. This is the only way we can ensure that once the lockdown is lifted, South Africans still have jobs to return to.

The DA has been working tirelessly with industry experts, international best practice models, and health policy specialists to compile a lockdown grid which outlines various levels of regulation applicable to different stages of coronavirus infection in South Africa. This will allow the lockdown to be sustained while ensuring that the South African economy does not collapse in the process. It will also assist in keeping the economy moving, protecting jobs and livelihoods whilst ensuring that we continue to contain the virus.

We will be finalising this model with our Shadow Cabinet tomorrow, following which we will submit it to the President for consideration. There is no binary choice between a loss of life to coronavirus and a loss of life to the poverty which faces hundreds of thousands of South Africans who may no longer have a job to return to or an income in their households should the lockdown be extended.

In the meantime the following are essential amendments which need to be enacted to ensure the sustainability and credibility of the lockdown, which relies on buy-in from citizens:

  1. Urgent relaxation on essential goods listings

The banning of the trade of certain goods such as clothing, and other items needs to be relaxed in order to allow for retailers to sell existing stock and for consumers to begin acquiring goods they may urgently need during the lockdown. As such, the list of essential goods must be re-evaluated and amended as a matter of urgency by the Minister of Trade and Industry.

  1. Coronavirus testing must be ramped up

The economic fallout of a lockdown extension can only be justified by a successful nationwide defeat of the coronavirus. It is for this reason that coronavirus testing must be ramped up in the coming weeks, and a comprehensive system of testing, tracking, and tracing must be put into place. Furthermore, government must provide a scheduled briefing on coronavirus statistics every day, bearing in mind that there is often a lag in information available and that existing data is often not credible.

  1. BBBEE requirements must be scrapped for SMME aid

It is incomprehensible that during a global pandemic, government still insists on discriminating against ailing businesses based on race-based policy. The racial makeup of a business should not affect its eligibility for financial rescue even under normal circumstances let alone in a national disaster. The President must urgently scrap this policy across all national departments, and fast track the flow of financial aid into the economy to prevent job shedding and further economic decline.

  1. The national budget must be readjusted to fund relief efforts

The President and the Minister of Finance cannot justify billion rand SOE bailouts footed by the taxpayer when the very industries for which they work are at risk of shutting down as a result of the lockdown. The amounts set aside in the current budget to fund SOE bailouts, such as the R16,4 Billion for SAA must be repurposed and released into the economy in the form of business relief.

  1. The Public Wage Bill must be amended to fund relief efforts

If the private sector is sustaining massive losses as a result of lockdown regulations, then the Public Sector Wage Bill, which is already grossly and unnecessarily bloated, needs to be trimmed to redirect funds into the economy. We cannot have government employees buoyed by taxpayer funds while taxpayers lose their jobs.

  1. Parliamentary oversight over the lockdown is essential

Parliament must step into the 21st century and start to convene committees to oversee governance during the lockdown period. All MPs are provided with the necessary resources to work remotely and should be working providing oversight during this time, while fleshing out an urgent economic recovery plan post-lockdown.

An extension of the coronavirus lockdown in South Africa creates a further national disaster: complete economic collapse. We must ensure that in our attempt to protect our country from the coronavirus outbreak, we also protect the livelihoods of our citizens who will be worse off coronavirus-free, but unemployed as a result.