The South African Special Risks Insurance Association (SASRIA) will form a key part of the intervention to help insured businesses restore their operations. Together with reinsurers, SASRIA has already begun its claim administration process. Pay-outs will be provided to all covered businesses. Crucially, government has decided to provide full financial backing to SASRIA should it exceed its solvency limits. The National Treasury is putting in place the necessary arrangements to ensure that this commitment is met should it be needed.
Qualifying uninsured businesses will be supported by the state, partly through a reprioritisation of the existing support mechanisms for Small Medium and Micro Enterprises (SMMEs). The Government is also engaging with relevant stakeholders (NEDLAC, banks, insurance companies and community organisations) to deal with the challenges facing uninsured businesses.
It is expected that the package will amount to R38.9 billion of on-budget items, including revenue measures of R5 billion and spending measures of R33.9 billion. As required by section 32 of the Public Finance Management Act (PFMA), the National Treasury will publish the quarterly revenue and spending position of the government at the end of this week. These fiscal indicators will show that government is sufficiently ahead of its revenue estimate to accommodate the fiscal relief measures. Therefore, the package can be accommodated without an increase in debt, especially borrowings from the market.
The overall budget is as follows:
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