{"id":516398,"date":"2021-08-27T08:19:10","date_gmt":"2021-08-27T06:19:10","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=516398"},"modified":"2021-08-27T08:19:10","modified_gmt":"2021-08-27T06:19:10","slug":"treasurys-sombre-warning-about-the-proposed-basic-income-grant-for-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/516398\/treasurys-sombre-warning-about-the-proposed-basic-income-grant-for-south-africa\/","title":{"rendered":"Treasury’s sombre warning about the proposed basic income grant for South Africa"},"content":{"rendered":"

A green paper<\/a> <\/strong>published by the Department of Social Development this week formally proposes introducing a basic income grant for South Africa, but finance officials have warned that the country needs to be more ‘realistic’ about its social security plans.<\/p>\n

The green paper proposes three options for a universal income, ranging from R585 to R1,268 a month, based on the country’s existing poverty lines.<\/p>\n

To raise enough funds for even the lowest of these options, the green paper suggests an income tax hike of 10 percentage points to raise the approximately R200 billion needed.<\/p>\n

However, deputy finance minister David Masondo cautioned against the aspirational plans proposed by the department – warning that it’s not something the country can afford.<\/p>\n

“We have to ask ourselves what are the preconditions for a social security grant proposed in these reforms,” he said. “As a country, we should sequence our current economic priorities, and we should not confuse our aspirations with what is possible economically.<\/p>\n

“Many countries that have social security funds have good economic growth. Currently, we have an economy that is faced with many fiscal risks.”<\/p>\n

Similar concerns were raised by the Treasury director-general, Dondo Mogajane, who said that South Africa’s debt to gross domestic product (GDP) is one of the largest in the world.<\/p>\n

The major driver of this debt is the wage bill and the perennial bail-out of state-owned enterprises (SOEs), and there are requests in the pipeline for additional funding for some SOEs.<\/p>\n

Basic income\u00a0<\/strong><\/p>\n

Despite concerns raised by officials and analysts, organised labour has called for the permanent introduction<\/a><\/strong> of a basic income grant in South Africa from 2022.<\/p>\n

The Congress of South African Trade Unions (Cosatu), National Congress of Trade Unions (Nactu) and the Federation of Unions of South Africa (Fedusa) held their mid-year Nedlac organised labour school this week to assess progress on the implementation of key policy interventions in South Africa.<\/p>\n

In a post-meeting statement, the unions welcomed the reinstatement of the special R350 Covid-19 grant until March 2022 and said that this should be the first step towards a universal income.<\/p>\n

\u201cIt must now be made permanent and be used as a foundation for a basic income grant.<\/p>\n

\u201cIt must be extended beyond March 2022 and adjusted in line with the food poverty level. The government needs to provide for its extension and enhancement in the October medium-term budget policy statement.\u201d<\/p>\n

\n

Read: South Africa\u2019s affluent are struggling to pay off their home and car loans<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

A green paper published by the Department of Social Development this week formally proposes introducing a basic income grant for South Africa, but finance officials have warned that the country needs to be more ‘realistic’ about its social security plans.<\/p>\n","protected":false},"author":10,"featured_media":487791,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[26],"class_list":["post-516398","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/516398","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=516398"}],"version-history":[{"count":11,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/516398\/revisions"}],"predecessor-version":[{"id":516434,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/516398\/revisions\/516434"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/487791"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=516398"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=516398"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=516398"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}