Minister of Labor, Social Welfare Dr Paul Mavhima has said government will soon announce a stimulus package for industry to shield local firms from adverse effects of the global Coronavirus pandemic.
Mavhima gave hints of a raft of new measures to be announced by the President Emmerson Mnangagwa during a virtual meeting hosted by Zimbabwe Coalition on Debt and Development (ZIMCODD) dubbed the Future of Work and Public Finance Management (PFM) Reform Indaba.
Mavhima said the government will waiver statutory obligations and set aside a Distressed Companies Relief Fund, with serious considerations of setting up an Unemployment Fund, although he did not reveal how much has been budgeted for these interventions.
He said new government interventions set to be announced, have been informed by multi stakeholder discussions particularly the labor Tripartite Negotiation Forum (TNF), without divulging the full range of interventions.
“Some of the recommendations that came from the TNF on Institution of a Distressed Companies Relief Fund, this is going to be pronounced in a few days’ time by his Excellency.
“There are going to be quite a number of measures to ensure business viability, this includes tax relief, moratorium on statutory contributions and debt services for both companies and individuals, setting up of a multi-disciplinary to resuscitate most affected industries like tourism.
“Most of the actions that have been taken in response to COVID 19 by government have come from recommendations that have come from the TNF, it shows that government has been responsive. The cabinet has been listening,” said Mavhima.
President of the Zimbabwe Congress of Trades Union Peter Mutasa however disputed this, “Much of the issues we discussed and called for have not been implemented by the state and have not been addressed by the government,” he said.
Mutasa said labor unions have called for tax relief measures and stimulus packages, moratorium on retrenchment, scaling up on health service delivery infrastructure, water and sanitation as well as subsidizing essential services.
He said relief measures by a government whose capacity to provide for its citizens has been decimated by disastrous neoliberal policies, corruption and cartels and a humanitarian disaster emanating from food insecurity affecting millions, should be contextual.
Mutasa Zimbabwe is currently suffering debilitating effects of austerity measures, which he termed the second ESAP whose vulnerabilities of the neoliberal policy have been laid bare by the global pandemic.
“We realized that many companies were going to suffer as a result of COVID19 and we called for government to, through social dialogue, come up with relief measures, a stimulus package for hardest hit sectors such as tourism, agriculture, transport and logistics including some in manufacturing.
“Neoliberal policies have decimated the states capacity to provide for the population. The working class has been reduced and stripped of any form or dignity.
“COVID has just exposed the corruption that we have been crying about, it has just exposed the state’s careless attitude in terms of its policies it has been implementing since ESAP 1…
“We must understand that all these demands are either going to be implemented or not in the political arena, so we need to organize mobilize or agitate so that we face a formidable capital and in some way quite brutal state,” said Mutasa.
Mavhima admitted that government has been falling short and will soon review the ZWL$600 million set aside by Treasury to fight coronavirus.
He said government will also redirect capital expenditure towards health expenditure, and raise additional resources from budget cuts in line ministries to redirect health spending within their jurisdictions.
Mavhima said government has availed a number of tax incentives for health related resources and equipment as well as providing additional funds for health services of civil servants through funds allocated to Premier Service Medical Aid Society.
“The whole idea was not to move money from specific line ministries but to say within the ministry budget how much can the Permanent Secretary target to ensure the ministry’s responsiveness to Covid 19.
“Within the ministries the Permanent Secretaries should mobilize funds for providing Protective Personal Equipment for their frontline workers, there is no specific target but each ministry should see within its coffers.
“Additional resources which will constitute some cuts from respective Ministry allocations are also being worked out and Treasury has already issued a circular of 20 March instructing ministries to identify areas of cuts where these resources will be redirected towards Covid,” said Mavhima.
ZIMCODD says objectives of the public finance meetings is to specifically influence legal and institutional arrangements for planning, mobilizing, appropriation and executing financial resources in the fight against COVID-19 and have people driven possible short and long terms solutions.
It said “The ability of a country to respond to emergencies, natural disasters and other catastrophic events depend on resilient, responsive public finance management systems anchored on transparency and accountability, enabling the transmission of data, information, and decisions between the finance ministry and emergency response agencies.”
