Basic income group wants government to hike SRD grant even more in April

The Universal Basic Income Coalition (Ubic) is calling on the Minister of Social Development to reject the R20 increase to the Social Relief of Distress (SRD) grant, saying it’s an insult and should be increased by R90 at a minimum.

Addressing the National Assembly on Wednesday (13 March), Godongwana said that the minister of Social Development would soon be publishing a “comprehensive social security programme” for public comment.

This plan would include regulation changes, among which will be changes to the “new grant” – referring to the R350 SRD grant – and how much it will increase.

“I am pleased to say that, subject to the finalisation of the comprehensive social security plan, we will increase the R350 to R370 by 1 April this year,” he said.

Speaking to Newzroom Afrika, Ubic coordinator Bukelwa Hans said this increase is a meagre improvement and an insulting pittance given the cost of living and increases in inflation since 2020.

“This grant was implemented in May 2020, and there has been no inflationary increase to the grant since then. To only increase this by R20 is an insult, and we cannot accept it,” she said.

Hans added that, when considering inflation, the increase should be around the R90 mark at minimum (a 26% increase) – “so we’re not happy”.

The Bureau for Economic Research (BER) agreed that an R20 increase is odd.

“This is the first increase since the introduction of the grant in 2020 and does not make up for the full loss of purchasing power amid rising inflation, but the timing of the announcement can conceivably be linked to the upcoming election,” the BER said.

The Bureau added that economists estimate that the R20 rise will cost the fiscus about R2.2 billion extra in 2024/25 than anticipated in February, which is concerning given South Africa’s precarious financial standing.

When asked whether the government can afford the R90 increase – and how it would fund the proposed increase – Hans said the government can afford it and has various mechanisms to find the money, without elaborating further.

Although Hans couldn’t provide the available funding avenues, an Intellidex study from July 2022 showed that taxes are the easiest mechanism to collect the needed funds.

The grant is widely expected to eventually become South Africa’s basic income grant.

According to President Cyril Ramaphosa, there are currently 9 million people receiving the grant, though fact-checkers say the real number of recipients is closer to 7.7 million.

National Treasury projections in the 2024 budget documents show the number of people receiving grants is expected to increase from 27.78 million in 2023/24 to 28.31 million this year.

Additionally, over 9.2 million people will receive the SRD grant this year, Treasury projects.

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