Tito Mboweni denies being pressured to reinstate grant
FINANCE Minister Tito Mboweni has dismissed claims that the government’s re-introduction of the R350-a-month social relief of distress (SRD) grant was merely a measure to boost the ANC’s electoral chances ahead of the upcoming local government elections.
Mboweni made the denial while responding to questions during a virtual media briefing, where he provided more details of his R38.9 billion package to assist unemployed people and businesses hard hit by the violent protests in Gauteng and KwaZulu-Natal.
The government has set aside R27bn for the payment of SRD grants to eligible and unemployed people, but Mboweni insisted that the ANC had nothing to do with it.
Mboweni said: “We operate within a society which experiences a lot of distress. Any caring government will come to the support of its citizens. There was no pressure from the governing party. There was no pressure from Luthuli House. Did I get a call from Jessie Duarte, the deputy secretary general of the governing party? No, she hasn’t (called).
“This was a conversation between the Ministry of Finance and the Presidency. We debated this issue at length, and President Cyril Ramaphosa, through his negotiation skills while a trade union leader, convinced us to release the R27bn,” Mboweni said.
He said the SRD grant would include support to childcare-givers on an application basis.
He said the government wanted to make it clear that this was not a permanent social protection solution. “Much work is still being done in this area, and additional borrowings to fund a consumption grant are not supported,” Mboweni said.
The minister and his officials, however, warned that this was not an extension of the grant that was terminated in May, but a reintroduction of it.
National Treasury director-general Dondo Mogajane also allayed fears that the country was likely to borrow money from financial institutions to fund the grant.
According to government officials, the money will come from the Finance Ministry following its ability to meet its revenue targets.
The media was also told by the head of the SA Revenue Service, Edward Kieswetter, that there has been an increase in tax compliance by major companies, particularly in the mining sector, which allowed the government to assist the unemployed.
Mboweni also announced relief measures to assist businesses that were destroyed and looted during the violent protests, saying they’ve urged the SA Special Risk Insurance Association (Sasria) to pay out claims immediately.
“Infrastructure damage is widespread, mainly in KwaZulu-Natal and Gauteng, where numerous buildings were set alight or property purposefully damaged.
“The current estimated cost of damage to property and equipment in eThekwini alone is R15bn. There is widespread damage to shops and malls, network towers, post offices, factories, roads and freight trains,” Mboweni said. He said hundreds of ATMs had been destroyed, making it harder to access cash.
Mboweni warned that while the vast majority of the damage may be covered through insurance, the real knock to the economy was the damage to business and investor confidence in the country.
He said the government had decided to provide full financial backing to Sasria should it exceed its solvency limits.
“The National Treasury is putting in place the necessary arrangements to ensure that this commitment is met should it be needed. Qualifying uninsured businesses will be supported by the state, partly through a reprioritisation of the existing support mechanisms for small businesses.”
He said the government was also engaging with relevant stakeholders (Nedlac, banks, insurance companies and community organisations) to deal with the challenges facing uninsured businesses.
“It is expected that the package will amount to R38.9bn of on-budget items, including revenue measures of R5bn and spending measures of R33.9bn. As required by section 32 of the Public Finance Management Act, the National Treasury will publish the quarterly revenue and spending,” Mboweni said.