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City Press reports that an enormous accumulated surplus of R99 billion is lying unused in the Unemployment Insurance Fund (UIF).
While the Fund says it’s going to invest part of the surplus to protect jobs, and new rules will soon help more people to qualify as beneficiaries of the fund, these steps will have little effect in making a dent in the surplus. In terms of the UIF Act, surpluses may be invested with the help of the Public Investment Corporation (PIC) and the Industrial Development Corporation (IDC). In the past decade, the PIC has invested R7 billion of UIF surpluses, and R4 billion has been invested in IDC securities. Makhosonke Buthelezi, UIF communications director, said that the UIF had instructed the PIC to invest its surplus in industries such as mining and manufacturing, where huge job losses have been experienced. The Democratic Alliance (DA) has previously suggested that contributions to the fund be decreased temporarily to boost the economy. Former finance minister Nhlanhla Nene considered the proposal, but rejected it after opposition from unions and bureaucrats.
- Read this report by Gerrit Van Rooyen, which also details pending changes to the UIF rules, at City Press
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