President of the Republic of South Africa
Private Bag X1000
Mr TT Nxesi, MP
Minister of Employment and Labour
Private Bag X9090
Mr E Godongwana, MP
PO Box 29
Dear Mr President, Minister Nxesi and Minister Godongwana
Plans of employment and labour minister to draw on the surplus funds in the Unemployment Insurance Fund and the Compensation Fund for job creation projects are out of line
1. In recent media reports, it was stated that employment and labour minister Thulas Nxesi has plans to draw on so-called surplus funds in the Unemployment Insurance Fund (UIF) and the Compensation Fund for job creation projects. Apparently a proposed spend of R15-billion before the end of the financial year in March 2024 to create 2-million jobs is on the cards.
2. This is a typical ruling party move i.e. to risk workers’ security in a dicey yet perfectly timed move to score political points in an election year.
3. Time and again funds like the UIF and the Public Investment Corporation (PIC) (and therefore by default the Government Employees Insurance Fund (GEPF)), become targets for these hairbrained schemes of the ruling party, where they try to use funds meant for one purpose to address another problem (like bailing out state-owned enterprises). With the PIC workers’ money is constantly being lost in cases where extended loans are not being paid back and are written off.
4. The UIF has enough problems to deal with as it is, with the R5-billion job creation deal involving Mthunzi Mdwaba’s Thuja Capital and its subsequent fallout and furthermore, the public knows only too well that the UIF has been quite dysfunctional. So dysfunctional that, at the moment ex-mineworkers are complaining that when they present their blue-cards at UIF offices, they are turned away empty handed. Some pass away without ever having the benefit of their UIF contributions.
5. The purpose of the UIF is clear, it is there for the benefit and security of South African workers in the awful event that they lose their jobs. This practice of raiding the PIC, GEPF and the UIF and risking the workers’ security for political expedience is wrong, immoral and must stop.
6. We hope to see the portfolio committee for labour and all South African unions call the minister for employment and labour to task on this matter.
7. The United Democratic Movement is not in favour of Minister Nxesi’s proposal on this score and calls on him to immediately cease any plans to use UIF funds in any way other than the manner it was intended for i.e. to give assistance to those who have paid towards having insurance for losing their employment.
Mr Bantu Holomisa, MP
President of the United Democratic Movement