Grant raise ‘pie in sky’ as poor suffer

Social grant increases are literally pie in the sky, because by giving an average inflation-based social grant increase, Treasury was instead taking from the poor and giving to the rich, an expert said.

According to Professor Patrick Bond of the School of Government in the Western Cape University, there was nothing to be excited about when Finance Minister Tito Mboweni announces this increase annually in his Budget speech, as the poor paid higher inflation than the middle and upper class.

“There is a phrase for it: reverse Robin Hood. While Hood would take from the rich and give to the poor, Treasury is instead taking from poor and giving to rich because they do not recognise that poor people’s inflation is higher than my inflation,” he said.

The poor should, instead, be given adjusted inflation-based increases as the average rate was not appropriate for them.

“What poor people are desperate for is food, transport and electricity,” Bond said. “Prices for these are getting too high…

“It is in this sense that the Treasury is taking away from poor people, by not giving them an inflation-adjusted increase that matches the inflation that they pay.”

Bond said the economic meltdown, stagnant growth and the Covid-19 economic onslaught meant social spending was likely to be hit by austerity as government repurposed spending.

“A year ago, when Covid-19 was on the radar, the health budget had already taken a R4-billion budget hit. There is also higher education, which will take a big hit, so fees must rise, instead of fall,” he said.

Bond said Mboweni should focus on wasteful, corrupt and destructive expenditure that goes to the mega-construction projects and the parastatals that have been bedevilled by massive corruption.

“Those are the big spending items.

“If you look at the climate of corruption, the catastrophic capital and labour-intense character, they should not be funded,” Bond said.

Mboweni will tomorrow present his Budget speech in parliament, against the backdrop of the already struggling economy.

There is a phrase for it: reverse Robin Hood. While Hood would take from the rich and give to the poor, Treasury is instead taking from poor and giving to rich.