Minister buckles
So it seems finance minister Enoch Godongwana has succumbed to pressure to provide the ANC with an election boost, after a series of poor polling results. He announced in the National Assembly on Wednesday that the Covid19 social relief of distress grant would be increased by R20 to R370 by April 1.
Assuming that about 8.5-million people receive the grant, this will cost an additional R170m a month, or an annual R2bn, in funds that were not budgeted for.
The money will have to come out of the R33.6bn allocated for the grant in the 2024/25 financial year, an amount surely calculated on the basis of the expected number of recipients. So either the money will have to be found elsewhere in the social development budget or there will be fewer recipients.
Just three weeks ago, Godongwana presented the 2024 budget in parliament. It is hard to believe that the National Treasury did not consider the possibility of increasing the grant during the extensive budgetary preparations, and had rejected it despite the likely strident demands by social development minister Lindiwe Zulu. So what has changed? One can only assume that it is the elections on the horizon.
Godongwana said Zulu would publish for comment a comprehensive social security programme and regulations to increase the grant. The preparation of the social security programme would also not be something Treasury was unaware of.
The finance minister was praised for not presenting a populist budget designed to win votes, but it seems he has buckled under party political pressure.