Insurance Bill will lead to massive job losses – Federation of Employers

A manager addresses workers at Mopani Copper Mines

The Zambia Federation of Employers (ZFE) has expressed shock that the Health Insurance Bill has passed second reading in Parliament despite recommendations from stakeholders to subject the law to further critical consultations.

And the ZFE has warned that if President Lungu assents to the bill, it will lead to massive job losses in the private sector.

ZFE President Wesley Chishimba said in a statement yesterday that he expected Parliament to defer the Bill until the stakeholders were properly consulted, as suggested by the Committee on Health, Community Development and Social Services.

“We listened to the National Assembly debates on the National Health Insurance Bill with keen interest. Judging by the informed submissions from some MPs on both sides, we expected that the August House would do the right thing by accepting the Committee on Health, Community Development and Social Services’ recommendation to defer the Bill until the stakeholders were properly consulted. It was therefore with shock and dismay that instead, the House passed the Bill,” he said

“Equally disappointing was the characterization during the debates of employers as profit-hungry entities that have no concern for the welfare of the country’s citizens. We are tired of being demonized when all employers know that their enterprise will fail if they do not care for the health and welfare of their employees. That is why many employers already have medical schemes in place for their employees.”

He said government was going to push enterprises out of business with it’s thirst for taxes.

“We wonder if there would be any Zambian in employment if most or all companies were loss making entities. We cannot be demonized on one hand and expected to support the entire economy of this country on the other. The private sector is the only viable source of the one million jobs that Government plans to create in this country. How can the private sector create those jobs when it is run into the ground with tax after tax after tax and no corresponding relief? Last year, the skills development levy was imposed at 0.5 percent of every single employee’s salary, including casual workers.”

Chishimba has since advised President Edgar Lungu not to assent to the bill, warning that it would cost the private sector employers huge sums of money per year and lead to retrenchment of workers.

“It is the position of the ZFE that enacting this Bill will cost the private sector employers huge sums of money per year. It would immediately put a number of salaried workers at risk of retrenchment. It is our position that we, as a nation, need to create more jobs, not diminish the appetite for Employers to do so. The National Health Insurance Bill does not provide any relief to our unemployed youth but merely decreases their chances of getting a job. It is our position that the Republican President should not assent to this Bill, as doing so would simply curtail private sector growth, impact negatively on GDP growth, heighten unemployment and reduce Central Treasury revenue collection. The ZFE and our social partners are available to be engaged in a consultative process that will address social welfare and national medical insurance schemes on a holistic and sustainable manner that speaks to social protection for all, including the unemployed. The current, rushed and ill-conceived scheme, is unsustainable and will merely bring more misery to the people of Zambia at large,” said Chishimba.

“If the Government keeps extracting the life-blood of capital from the private sector to the point where it bleeds dry, the only non-indigent citizens in this country will be the public servants. And for those, even the Honourable Minister of Health expressly stated that they alone cannot sustain an insurance scheme. If this Bill becomes law, employers will critically examine the financial impact that the insurance contributions will have on the sustainability of their businesses. They will adjust their labour force accordingly. As we had indicated before, that means we cannot rule out mass retrenchments. It will lead to industrial unrest because employers will not be accommodating wage increases during wage negotiations. ZFE calls on Government to be responsible with the money it is already extracting from its corporate and individual citizens and not to facilitate its fiscal mismanagement by looking for more.”