Dear Editor
The Democratic Alliance (DA) is demanding answers on why Minister Nomakhosazana Meth has poured hundreds of millions of rands into bailing out ArcelorMittal South Africa (AMSA), while thousands of workers elsewhere in the manufacturing and minerals sectors are still losing their jobs.
In recent months, Ford has cut around 500 jobs, Goodyear nearly 900, and Glencore/Merafe about 2 500. AMSA itself had already announced plans to shut down its Newcastle long steel business, putting 3 500 jobs at risk. Reports now suggest that as many as 4 000 jobs could be lost, including at its main Vanderbijlpark plant.
Despite this, AMSA continues to benefit from a special government protection package.
This includes:
- R417 million in UIF grants, supposedly conditional on no retrenchments;
- R2.6 billion in IDC loans;
- tariff hikes to block competition; and
- even cheaper electricity tariffs approved by Eskom and NERSA while ordinary South Africans pay more.
In total, government has promised over R3.1 billion to prop up one company. That’s a billion rand more than what is spent on supporting all small businesses in South Africa in a year. And, as the latest job cuts show, there has been no return on this investment.
The DA has submitted urgent parliamentary questions to Minister of Employment and Labour to establish exactly how much of the UIF’s money AMSA has already taken. The UIF exists to protect workers, not to bankroll failing businesses. Workers deserve to know whether their contributions are being used responsibly.
The UIF has a troubling history of failed bailouts, including the R400 million squandered on Daybreak Foods: the latest AMSA subsidy risks being yet another waste.
South Africa urgently needs structural reforms to make our industries competitive, not endless bailouts that protect a few companies while thousands of workers still lose their jobs.
Regards
Michael Bagraim MP
DA Spokesperson on Employment & Labour