Social grants bill to hit R122bn
Youth employment subsidy drifts off agenda Social spend takes up 60% of funds
Donwald Pressly THE STATE now supports nearly 16 million people on social grants, with expenditure on this item projected to rise from R105 billion in 2012/13 to R122bn in 2014/15.
Finance Minister Pravin Gordhan announced in his Budget yesterday that the monthly state old age pension and the disability and care dependency grants would rise by R60 a month to R1 200, and R1 220 for pensioners over the age of 75.
Foster care grants are set to increase by R30 to R770 a month and child support grants will be to R280 a month.
A community work programme will cost nearly R80bn over the next three years. There will be 332 000 people employed in this temporary works programme by 2014/15, up from just 90 000 in March last year.
At the same time, calls from the business sector for a youth employment subsidy have drifted off the government agenda, although last year Gordhan indicated that it would be a priority of the government. In yesterday’s Budget speech he mentioned it in passing.
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Referring to the Nedbank/old Mutual Budget speech competition winners who considered the question how South Africa might reduce youth unemployment, Gordhan said several great ideas had emerged.
One winner, Ian Mrozek, offered “an interesting variation on the idea of a youth subsidy… he proposes that it should go to new business start-ups as a tax incentive, which would encourage entrepreneurs and business innovation”.
Gordhan said it was right that South Africa should look for “many ways of supporting enterprise development” in many different settings and circumstances – in urban and rural areas and in agriculture, manufacturing and service sectors. He said the country had to move beyond debate and find the policy levers that would make a difference to the pace and dynamics of job creation across the entire economy.
He said reducing unemployment was at “the centrepiece” of the government’s approach to reducing poverty. Social spending made up nearly 60 percent of the state’s expenditure in the next year, up from 49 percent a decade back.
The government provided social grants to almost a third of the population, paid for largely free services at public health facilities and in no-fee schools for 60 percent of learners, while it also paid for housing, water and electricity in poor communities.
“The average value of the social wage for a family of four in 2012/13 was about R3 940 a month. This represents a substantial investment in household living conditions, financed through a broadly progressive tax structure,” Gordhan said.