Enoch Godongwana, the South African Minister of Finance, just said that the government will keep giving out Covid-19 social relief of distress (SRD) grants until March 31, 2024. The grant was made available in 2020 to help poor families get through the pandemic. This move hurts the already tight public finances of the country, since the government already spends more than half of its budget on social welfare.
In his Budget Speech for the 2023-2024 fiscal year, Godongwana set aside R36,1 billion to pay for the R350 grant, which will continue to help low-income households. The government’s spending plan for the next three years includes an extra R227 billion. Most of this money will be used to extend Covid-19 grants.
Godongwana said that the grants are the government’s single biggest plan for extra spending in the new financial year. But he warned that South Africa’s budget could be hurt if the current Covid-19 grant was replaced without an affordable alternative. To fix this, the National Treasury is working with partner departments to look at ways to give South Africa’s working-age population the right social protections. This could include replacing or adding to the current Covid-19 SRD grant.
Godongwana said at a pre-budget press conference that taxes could be raised to either make the grant better or change it into a basic income grant. He said that any permanent increase in spending, like a new social grant, would need to be matched by permanent increases in revenue or decreases in spending somewhere else.
Social grants got a total of R248.4 billion, which is R5.9 billion more than last year. Most of the growth in the social grants bill is due to an R30 billion allocation that pays for increases in all categories that are tied to inflation.
Even though the government is trying, some groups in civil society think the grants are not enough. During Godongwana’s budget speech, about 100 people from different groups marched from KwaLanga to Kariega Town Hall with empty pots to protest. The people who marched wanted the R350 Social Relief of Distress grant to be changed into an R1,500 Basic Income Grant for all unemployed people.
The government thinks that the number of people who get social grants will go up from 18.6 million to 19.6 million, which is about a third of South Africa’s population. South Africa’s public finances will remain under pressure in the years to come because of the growing number of people who need help and the need for more money to help them. The government has to make hard choices to make sure it can meet the needs of its people and keep the public finances in good shape.
For more info visit the sassa website: https://srd.sassa.gov.za