A dan­ger­ous sit­u­a­tion brew­ing

The Star Early Edition - - OPINION & ANALYSIS -

THE FIG­URE “R151 000 000 000” has many ze­roes. But R151 bil­lion is what our coun­try will pay out in the cur­rent fi­nan­cial year for so­cial grants. It in­cludes money for, among oth­ers, child sup­port, foster care, dis­abil­ity, older per­sons and war veter­ans.

It’s honourable to give money to those who don’t have. For most of the 17 mil­lion so­cial grant ben­e­fi­cia­ries it’s the only money they have for ba­sics like food, hous­ing, elec­tric­ity and water.

That hav­ing been said, it’s not much money. If it’s the only in­come source it won’t en­sure a de­cent life. The most you’d get for an old-age grant is R1 620 a month, and R380 for a child sup­port grant.

In the next two to three years, the num­ber of peo­ple on so­cial grants is ex­pected to in­crease to more than 18 mil­lion. It will then cost us about R175bn a year.

This week it emerged there were more peo­ple col­lect­ing so­cial grants than work­ing – 17 mil­lion peo­ple re­ceived so­cial grants while 15.5 mil­lion were in for­mal jobs. The in­for­ma­tion comes from re­search con­ducted by the South African In­sti­tute of Race Re­la­tions.

Clearly, it isn’t a sit­u­a­tion that’s sus­tain­able. With our econ­omy in a tech­ni­cal re­ces­sion and la­belled junk by two of the three main global rat­ings agen­cies, money is leav­ing our coun­try rather than com­ing in. As a re­sult, more jobs will prob­a­bly be lost. That’s go­ing to make it more dif­fi­cult for the gov­ern­ment to raise enough taxes to pay so­cial grants in the com­ing years.

The ANC should take note of the sit­u­a­tion. While many peo­ple have lost faith in thep­arty, more would do so if they don’t re­ceive their so­cial grants.

The party should make job cre­ation and eco­nomic growth its main fo­cus rather than who will suc­ceed Pres­i­dent Ja­cob Zuma as pres­i­dent of the ANC later this year. Given the pre­car­i­ous eco­nomic sit­u­a­tion we find our­selves in, there might not be much to in­herit.

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