Parliament greenlights R330 billion for grants in South Africa
The National Assembly passed the 2024 Appropriation Bill, which will increase social transfers by nearly R50 billion.
Parliament said that the bill aims to appropriate money from the National Revenue Fund (NRF) for the State’s requirements for the 2024/25 financial year.
“The Bill not only appropriates money for the requirements for the current financial year but also prescribes conditions for the spending of the funds withdrawn for the 2025/26 financial year before the commencement of the Appropriation Act and for matters incidental to it,” said Parliament.
The Appropriation Bill was tabled by the Minister of Finance Enoch Godongwana during the 2024 Budget in February, along with:
- Division of Revenue Bill;
- The Budget Review;
- The Second Adjustments Appropriation Bill (2023/24 financial year);
- The Gold and Foreign Exchange Contingency Reserves Accounts Defrayal Amendment Bill;
- The Estimates of National Expenditure; and the Revenue/Tax Proposals.
The Bills were tabled as per section 10(1)(a) of the Money Bill and Related Matters Act 2009 (as amended in 2018).
However, the 2024 Appropriation Bill lapsed after the last sitting of the National Assembly before the 2024 general elections and was revived by the National Assembly on 2 July 2024.
Section 10(7) of the Money Bill and Related Matters Act states that Parliament has four months to process the national budget from the start of the financial year of the period as tabled by the Finance Minister.
“The 2024 Appropriation Bill strikes a careful balance between fiscal consolidation and development. On average, 60.2% of consolidated non-interest spending will continue to be spent on the social wage (health, education, social protection, community development, and employment programmes).”
Notably, spending on social transfers will rise from R283.4 billion in 2023/24 to R331.5 billion in 2026/27.
Proposed additional spending of R18.6 billion in 2024/25, R19.2 billion in 2025/26, and R19.8 billion in 2026/27 will also ensure that the salaries of teachers, nurses, doctors, police, and many other public servants are met.
The Bill proposes a total appropriation of R1.1 trillion in the 2024/25 financial year (or R3.4 trillion over the next three years) by vote.
When including direct transfers to provinces and local government, direct charges and total vote appropriation, provisional allocations not assigned to votes, and the contingency reserve, the total estimate of national expenditure amounts to R2.1 trillion for the 2024/25 financial year.
Over the medium-term expenditure framework, the national estimate rises to R6.8 trillion.
The National Assembly adopted the Bill without amendments, and it will now be sent to the National Council of Provinces for concurrence.
The Bill can be found below:
Push for basic income grant
South Africa’s new Government of National Unity (GNU) still plans to create a basic income grant.
Although President Cyril Ramaphosa said that the best way to deal with poverty is to give people access to jobs, he said that the government had made interventions to support the unemployed through a series of interventions, such as the Social Relief and Distress (SRD) grant.
Speaking at the Opening of Parliament, Ramaphosa said that the SRD grant, which is set to become the basic income grant, has been a lifeline to millions of unemployed people in South Africa.
Prior to the election, the ANC promised to finalise a basic income grant within two years.
The SRD grant has been extended several times since the end of the pandemic and was increased by R20 to R370 from 1 April.
In the 2024 budget, Godongwana said that the government had provisionally allocated funding for the SRD until March 2027.
That said, many experts have raised concerns about the impact on state finances if a permanent basic income grant is introduced. For a country with only 7 million taxpayers, South Africa has 28 million grant recipients.
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