Malawi Congress of Trade Unions (MCTU), a 25-member group affiliated trade unions of with over 300 000 members, has asked government to ensure that workers increase their disposal income and are allowed access to essential items during the coronavirus (Covid-19) crisis.
In its proposal to government, employers in the private sector and non-profit-making organisations which Business News has seen, dated March 26 2020, MCTU secretary general Denis Kalekeni said while the union hopes for no job loss, in the event of a lockdown, workers must be paid their salaries and other employment benefits.
He said to achieve this, workers earning a salary of between K40 000 and K100 000 should be given a 100 percent tax relief, temporarily increase tax-free-bracket from the current K45 000 to K100 000, remove or reduce value added tax (VAT) on all food and non-food items, including sanitation items and consider providing some financial packages, cash transfers and supplying free food to vulnerable workers, including micro, small and medium enterprises.
Said Kalekeni: “The government should ensure that no worker is fired or retrenched due to Covid-19. Government and all employers should ensure that all workers are paid full salaries and settle all arrears if any immediately.”
The union also wants banks to soften loans, lower interest rates and suspend all loans that businesses and individuals owe financial institutions until such a time that the negative impacts of Covid-19 are minimised.
The demands by MCTU comes barely five days days after Employers Consultative Association of Malawi (Ecam), an apex body representing employer interests, also asked government to consider reviewing tax and other policy measures in the fight against Covid-19 for business survival.
The cost of living has also been escalating. According to Centre for Social Concern (CfSC), a family of six needed K209 460 per month in 2019 from K194 484 per month in 2018 and minus other essentials, food cost increased from K112 320 to K126 649.
International Monetary Fund (IMF) tracker on policy responses to Covid-19 shows that at regional level, Kenya, Rwanda, Mozambique, South Africa, Zimbabwe and Zambia have since made changes to their fiscal, monetary and micro-finance policies in response to the outbreak while Tanzania was yet to register any policy reaction.
Catholic University dean of social sciences Gilbert Kachamba observed yesterday that there is no universal way of handling the pandemic as measures taken by the rich economies cannot be replicated by the poor economies.
He said: “Total lockdown will be more catastrophic and damaging than the disease itself.”
Treasury is already under pressure as it continues to record deficits with figures showing central government budgetary operations for the first half of this financial year closed with a deficit of K165.7 billion.
This, coupled with the fresh presidentuial election mid this year, is also projected to keep spending elevated, ultimately straining the fiscal balance.
Ministry of Finance, Economic Planning and Development spokesperson Davis Sado in an interview on Sunday said Treasury will be making an assessment on the impact of the coranavirus on the budget, stating that that assessment will be a tool to assist government in making some decisions on how issues have to be addressed.