‘Increase pension grants’
Grants boost ‘real economy’
ANY increase in VAT and the fuel levy will be devastating for the poor.
Mervyn Abrahams, the programme coordinator of the Pietermaritzburg Economic Justice and Dignity Group, believes that the government should listen to campaigners and increase the pension grant to R2 500 a month.
On February 20, more than 100 pensioners from the Pietermaritzburg area took part in a protest outside the National Treasury in Pretoria.
The pensioners, who receive about R1 700 a month, said they were struggling to cope with high food prices.
“They demanded that their old-age grant be increased to R2 500 and that government should give them an annual 13th cheque in December,” spokesperson Noxolo Mfocwa said.
“The figure is still less than the national minimum wage, which was recently set by government at R3 500.
“One of the things which many people don’t realise is that most of the pensioners use the grants to take care of their children as well as grandchildren.”
Abrahams said his organisation fully supported the campaign by the pensioners forum.
“We believe that if they are given a grant increase it will be an investment in the economy, because every cent of that grant money is being very well spent in the real economy,” he added.
The Pietermaritzburg Economic Justice and Dignity Group would like to see Finance Minister Tito Mboweni come up with a new economic framework for the country, rather than to simply continue to patch up the existing system with a Band-Aid.
“We need to recognise that the South African economy is locked into a trajectory of low growth, high unemployment and low wages,” Abraham said. “We need to make long-term decisions to get out of this scenario. We need to properly consider what will provide a stimulus for the economy, if we are serious about stopping the deepening inequality in our economy.
“We believe this stimulus can best be done by increasing the income which flows into the poorest areas, for example through social grants. Increasing social grants is not, what many people think, a deep, dark hole where money goes in and is never seen again. That money is, in fact, being spent in the real economy on food, education and health.”
The group is also worried about the government making any increase in the level of valued added tax (VAT), saying it would have a negative impact on those who could least afford it.
Abrahams said VAT already accounted for 7% of the cost of a 32item basket of essential groceries, which means that R227 out of R3 200 goes to the taxman. “The only result from an increase would be that people will buy less food. And, if people buy less, then retailers will suffer and that could result in further job losses.
“We really have to be very careful not to overburden the consumer,” he added.
The organisation will also be monitoring Mboweni’s budget briefing closely to see if consumers will have to pay more for water and electricity in the coming months. And they hope the minister will crack down on municipalities to ensure they spend the money they receive from ratepayers and Treasury properly.
“We don’t have limitless resources ... it is incumbent on Treasury to use every rand for its proper purpose and that we get value for our money. This is especially important in municipalities where the amount of money being squandered on tenders is ridiculous,” Abrahams said.
Increasing social grants is not, what many people think, a deep, dark hole where money goes in and is never seen again.