Finance Minister Enoch Godongwana announced yesterday that the Covid-19 social relief of distress grant has been extended for one year until March 2024, but this decision comes with strings attached.
In his 2022 Medium-Term Budget Policy Statement, Godongwana said the extension was to give the government additional time to consider options for working-age people that could replace, complement, or lead to the adjustment of the grant.
The grant was introduced in May 2020 as a temporary measure to respond to the needs of the most vulnerable, who were affected by lockdown measures. It has been extended several times since then.
Recently, several non-government organisations, trade unions, and researchers have called for the government to transform emergency relief grants into a fully-fledged universal basic income (UBI) grant.
Godongwana said discussions on the future of the grant were ongoing and involved difficult trade-offs and financing decisions.
“Despite the provision made in this budget, I want to reiterate that any permanent extension or replacement will require permanent increases in revenue, reductions in spending elsewhere, or a combination of the two,” he said.
The minister said given the large cost of extending this grant, increases to other social grants in 2023/24 would be slightly below inflation, and other social welfare priorities might remain unaddressed.
Godongwana said: “This is what is meant by trade-offs: balancing the need to address one priority over another.”
He said overall, consolidated government spending was projected to increase from R2.21 trillion in 2022/23 to R2.48 trillion in 2025/26 at an average growth rate of 4%.
“The social wage, totalling R3.56 trillion over the next three years, or 59.2% of the consolidated non-interest spending, will take up the biggest share of the budget in support of poor households and the most vulnerable in our society,” he said.
Godongwana said the Department of Social Development received the second-largest share of the consolidated budget over the medium-term expenditure framework (MTEF) period.
He said from October 1, 2022, the old age grant, war veterans grant, disability grant, and care dependency grant increased by an additional R10 per month – from R1 980 and R2 000 for over-75s and war veterans to R1 990 and R2 010.
There would be no increases in child grants.
Godongwana said the largest allocations of the budget were directed to the education, health and social development sectors.
Meanwhile, in a bid to support improved learning outcomes, the National Treasury has announced that provincial education budgets would stabilise as funding is added for compensation of employees to fill teacher vacancies and reduce class sizes.
Godongwana said policy decisions were still required to keep compensation spending in line with resources over the longer term.
To continue providing nutritious meals to nine million pupils each school day, funding would be added to the national school nutrition programme conditional grant over the next three years.
Godongwana said the Cabinet received the ministerial task team report on student funding in higher education and training, which recommended more work on a comprehensive funding model.
“The bursary for students from families with annual incomes below R350 000 will, therefore, continue while funding proposals are being developed,” he said.
The South African Police Service would receive additional funding to increase the number of student constables to improve capacity, mainly in police stations.
The Department of Defence and Home Affairs would receive additional funding to enhance border security and territorial integrity.
Funding will also be allocated to the National Prosecuting Authority to increase capacity in specialised tax units and the Investigating Directorate, procure specialist prosecution services for complex matters (especially financial crimes), appoint forensic auditors and accountants to deal with high-priority asset forfeiture matters, establish a digital forensic data centre, and finance increased witness protection operational costs.
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