The Democratic Alliance (DA) has noted that the Standing Committee on Finance has endorsed its recommendation of expanding the zero-VAT-rated food basket to include ten essential food items.
This recommendation is set against a backdrop of stunted economic growth, a widening budget deficit, high inflation, and borrowing costs – resulting in a cost-of-living crisis that is affecting every South African, but especially the poor.
The latest food basket data from the Pietermaritzburg Economic Justice and Dignity group (PMBEJD) shows that its nutritional basket of foods has increased by over R140 in October and will set consumers back R5,297.58.
This is R141.81 (2.8%) higher than in September 2023 and almost y R509.75 (10.6%) higher than the same basket in October 2022.
The basket comprises 44 food items that feature in the monthly shopping of the majority of South African households and gives an indication of real price shifts at a retail level in the country, even when compared to the official inflation rate.
Year-on-year inflation for the basked was at 10.6% – higher than food inflation tracked in Stats SA’s CPI, which came in at 8.1% in September.
Of the 44 items in the basket, 25 are still showing double-digit price jumps compared to a year ago, and 12 of these items are more than 20% higher. All of these high-increase food items are fruits, pantry essentials, and vegetables.
Additionally, according to the PMBEJD, the cost of a basic nutritional food basket for a family of four persons is R3,655.70. This is R421 (13%) higher than the same basket in October 2022.
In October 2023, PMBEJD calculated that workers’ families would underspend on food by a minimum of 45,8% (having R1,983 left after transport and electricity and with food costing R3,655.70). In this scenario, there is no possibility of a worker being able to afford enough nutritious food for her family.
If the entire R1,983 all went to buy food, then for a family of 4 persons, we are looking at R495.75 per person per month. This is below the food poverty line of R760.
Considering these realities in South Africa, the DA has called upon the Minister of Finance to act on the Committee’s recommendation and noted that the recommendations propose that the basket must be expanded to include essential food items such as:
- Bone-in chicken;
- Tinned beans;
- Wheat flour;
- Peanut butter;
- Baby food;
- Coffee; and
- Soup powder.
The DA further noted that this would alleviate financial pressures on households who are battling to put food on their tables, with 81% of South African households already skipping one meal a day due to soaring food costs.
Despite the budget deficit and current operations to tell in spending across the national government, there is sufficient space for the expansion of the zero-VAT-rated food basket without any increases in taxes on other fronts, added the DA.