The Department of Labour has emphasised that individuals who found themselves without work in the coming year could still secure claims from their Unemployment Insurance Fund (UIF) contributions.
This news comes amid an announcement by Labour Minister Mildred Oliphant that R2billion from the UIF would now be allocated to the Project Development Partnership (PDP) Fund which was established by the Public Investment Corporation (PIC).
Oliphant on Friday launched the R2bn fund in Pretoria, saying the money would go towards aiding “small business start-ups” which created employment opportunities and contributed to growing the country’s economy. While the function is located primarily in the Department of Small Business, which we respect, we felt the need to lend a hand and make a contribution,” Oliphant said.
With the country’s unemployment rate sitting at 27.5% and retrenchments having hit some sectors this past year, UIF director of communications Makhosonke Buthelezi allayed any fears of contributions drying up in the future saying the R2bn fund by the Labour Department was an investment and not a grant.
“As the UIF, we currently invest with the PIC. Out of our investment portfolio, there is 20% that has been allocated to socially responsible companies that are not listed on the JSE. These companies must have an impact on society. For instance, Eduloan grants loans to students. The biggest return for us is students being put through school,” he said.
Buthelezi added that because of the surplus that the department had from the contributions made annually, they were mandated by law to invest the money.
“If we were to find ourselves with a huge unemployment crisis we would still make money readily available from the interest accrued from the investment,” he said.
Buthelezi highlighted that the R2bn would be invested with the PIC every year. He, however, pointed out that the initial process would not happen immediately as due processes had to be followed and that fund managers were still yet to be appointed.
Meanwhile, Oliphant said the UIF had contributed immensely in the labour sector by making resources available to companies that found themselves in economic distress.
“The R2bn allocation towards this fund demonstrates the government’s commitment to investing in small businesses. The funding gap in the early stage venture capital space limits the growth of innovative and high-value businesses. We recognise that closing this gap requires us to work together as partners,” she said.
The PDP Fund is expected to create and support more than 10000 jobs.