SOCIAL GRANTS

NO mention was made in the Budget about a mooted Basic Income Grant for South Africans. Carmen Nel, economist and macro strategist at Matrix Fund Managers, says: “The Budget does not allow for a Basic Income Grant, as the finance minister rightly notes that a structural increase in spending would require a structural increase in revenues, which would mean a personal income tax or VAT rate hike. This would be a notable risk to spending in the medium term, given socio-economic and political pressures.”

However, the Budget has provisioned R44 billion in 2022/23 to continue the special Covid-19 social relief of distress grant (R350 per beneficiary per month) for another 12 months. The existing social grants will all be increased by 5% except for the foster care grant (1.9% increase) and the child support grant (4.3% increase).

Hannes van den Berg, chief executive at Consult by Momentum, says that while tackling inequality is necessary, it will become increasingly challenging considering that South Africa already spends 3.3% of its GDP on social expenditure. “Social grants are going to 46% of South African citizens! The ruling party is creating a dependency on social grants among their voters – as opposed to creating meaningful employment opportunities,” Van den Berg says.