IRR offers solutions to save livelihoods during the Covid-19 pandemic

Government should adopt a scheme where it gives people early access to their retirement savings to cushion financial hardship caused by the coronavirus pandemic.

Deadlines on debt repayments by banks should also be extended where sudden unpaid leave or sources of income compromised by Covid-19 negatively impacted personal liquidity.

These are the suggestions proposed by the Institute of Race Relations (IRR) as SA goes into lockdown at midnight on Thursday in a bid to curb the spread of Covid-19.

The lockdown will be in place until April 16.

In a report titled Friends In Need, Covid-19: How SA can save #LivesAndLivelihoods, the IRR said actions taken by government, business and civil society had, for the most part, been praiseworthy.

The IRR said the proposals contained in the report offered practicable responses to the immediate, medium and longer term challenges in a number of areas, including social stability and financial stability.

“As Bloomberg reports, the Australian government is moving to give people early access to their retirement savings to cushion financial hardship,” the report said.

The IRR said those in financial distress will be allowed to access up to A$10,000 (about R102,000) of their pension savings in the current fiscal year (ending June 30) and another A$10 000 in the next fiscal year.

“A similar scheme could be implemented in SA, where pension funds (before the recent sell-off of stocks and bonds) were valued at some R4,4tn.”

The IRR said if 1% were allowed to be withdrawn, this would amount to R33bn.

“This sum could provide an important boost to working pension fund members needing additional or replacement income,” the report said.

On extensions on debt repayments, the IRR said grace periods should be allowed for individuals and firms facing potential bankruptcy, especially industries vulnerable to travel restrictions, such as civil aviation, tourism, hospitality and manufacturing.

“There should be a five-month loan repayment freeze on individuals who may have lost their jobs due to the coronavirus.”

The report said as many educational activities will cease, the IRR recommended the creation of e-learning capacity on a large scale.

“Schools should be equipped to continue teaching lessons online to minimise the time needed to catch up on the syllabus once classes resume when the pandemic ends.

“If necessary, an online platform should be set up by the education departments to upload content for easy access.