South Africa’s fiscus can not afford a permanent income grant, with experts noting that the government should focus more on improving employment in the country.<\/p>\n\n\n\n
Talks over a Basic Income Grant in South Africa have been on the table for a long time amidst the nation’s high unemployment and elevated wealth inequality. <\/p>\n\n\n\n
Speaking in his 2025 State of the Nation Address, President Cyril Ramaphosa said that the Social Relief and Distress (SRD) Grant could be used to create a more sustainable source of income. <\/p>\n\n\n\n
The SRD Grant was established in 2020 amidst the COVID-19 pandemic and was used to provide millions of South Africans with access to a small amount of funds to protect them from extreme poverty.<\/p>\n\n\n\n
The grant has been expanded from R350 to R370 per month and supports over 10 million people in the country. <\/p>\n\n\n\n
\u201cThe Social Relief of Distress Grant is an essential mechanism for alleviating extreme poverty.”<\/p>\n\n\n\n
\u201cWe will use this grant as a basis for the introduction of a sustainable form of income support for unemployed people,\u201d he said.<\/p>\n\n\n\n
South Africa’s unemployment rate is one of the highest in the world, standing at 32.1% as per the latest available data. <\/p>\n\n\n\n
Despite the commitment to create a Basic Income Grant, there are still extreme questions about how the state will be able to afford the grant. <\/p>\n\n\n\n
Speaking at a media roundtable, Deloitte Southern Africa Chief Economist Hannah Marais said that the basic income grant is a good example of when political promises contrast with the realities facing the state’s coffers. <\/p>\n\n\n\n
Marais said that there are still question marks over the Basic Income Grant. Although the SRD Grant has been around for years, it is a temporary measure and is not included in Treasury’s budget projections. <\/p>\n\n\n\n
Although she said that a certain cushion is required to help the most in need, the primary long-term focus of the government should grow employment sustainability. <\/p>\n\n\n\n
This sustainable employment should ensure that employment figures improve consistently. The focus should also be on creating the right jobs, which create products and add value. <\/p>\n\n\n\n
Marias’s comments come ahead of the 2025 National Budget, which will be delivered by Finance Minister Enoch Godongwana on Wednesday, 19 February. <\/p>\n\n\n\n
A recent high court judgement also scrutinises the ‘temporary’ nature of the SRD grant, creating another funding headache for the National Treasury. <\/p>\n\n\n\n
A ruling from the High Court said that the SRD Grant is now a permanent feature of South Africa\u2019s social assistance regime. <\/p>\n\n\n\n
The state has argued that the grant would be unaffordable if it was not deemed a temporary measure and requires a more dedicated funding measure.<\/p>\n\n\n\n
This has also been on the basis that access to the grant has been restrictive. <\/p>\n\n\n\n
However, the High Court ruled that the affordability of the grant from a fiscal perspective cannot be the reason to exclude people in poverty.<\/p>\n\n\n\n
The Bureau for Economic Research said that this means that the qualifying recipients for the SRD could rise from the current budget of 10.5 million people to over 18 million.<\/p>\n\n\n\n
This would require roughly an increase of R35 billion per year to afford. <\/p>\n\n\n\n
Treasury said that it is studying the judgement and could appeal the ruling, meaning that may or may not be brought up in Godongwana’s speech next week. <\/p>\n","protected":false},"excerpt":{"rendered":"
Grants are essential for South Africans in extreme poverty, but the government should still prioritise other areas of growth. <\/p>\n","protected":false},"author":95,"featured_media":768311,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13716],"tags":[181,20799],"class_list":["post-811180","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-budget-speech","tag-deloitte","tag-godongwana"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/811180","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\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=811180"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/811180\/revisions"}],"predecessor-version":[{"id":811218,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/811180\/revisions\/811218"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/768311"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=811180"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=811180"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=811180"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}