National Treasury says that it is still considering proposals around a universal basic income grant for South Africa, but it maintains that it cannot be done in a fiscally irresponsible way.<\/p>\n
In the 2021 Mid-Term Budget Policy Speech, finance minister Enoch Godongwana said that, in view of the Covid\u201019 related job losses, increasing poverty and inequality, Treasury and the government should seriously consider a basic income grant after the necessary consultations with relevant stakeholders.<\/p>\n
These consultations were expected to yield some results by the time of the 2022 budget.<\/p>\n
However, Treasury said that it still doesn’t have an answer on the BIG just yet.<\/p>\n
“The Covid\u201019 pandemic increased national debate on the possibility of a universal basic income grant, and the government is considering various proposals in this regard,” it said.<\/p>\n
“Any proposals to expand this system need to be fully and appropriately financed by closing existing programmes to free up revenue, or through permanent increases in revenue collection.”<\/p>\n
Speaking ahead of his budget speech, Godongwana indicated that all of South Africa’s social grants would be up for review as the government seeks a sustainable way to support the poor.<\/p>\n
Approximately 46% of the entire population receives some form of social grant in the country, which has been flagged as unsustainable.<\/p>\n
The R350 Social Distress Relief grant, introduced in 2020 to support those who were left unemployed or destitute due to the Covid-19 pandemic, is widely seen as the base point for a permanent basic income grant for the country, with many analysts expecting it to be made a permanent fixture in the coming years.<\/p>\n
President Cyril Ramaphosa announced in his State of the Nation Address at the start of February that the SRD grant would be extended for another 12 months.<\/p>\n
According to Godongwana, the extension of the SRD grant – at a cost of R44 billion – could be “comfortably” accommodated in the budget because of a tax overrun, but he stressed that this was a temporary windfall.<\/p>\n
The minister said that permanent programmes cannot be funded by temporary revenue and that it is essential to maintain social protection in a sustainable way.<\/p>\n