Collapsing South Africa: Almost half of all South Africans are now on Government grants

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Almost half of all South Africans now rely on some financial support from the government, says the Department of Social Development.

In a presentation to parliament this week, the department said that about 31% of the South African population relies on social grants – which include everything from disability to childcare.

However, there are approximately 10 million beneficiaries who depend on the monthly R350 special Covid-19 Social Relief of Distress Grant alone.

This increases the number of South Africans who rely on social transfers to about 47%, it said.

Data from Bloomberg and Old Mutual shows that the country currently has twice as many welfare beneficiaries as registered taxpayers. The government is now considering the feasibility of introducing a basic income grant in South Africa which is expected to widen the social safety net further.

Writing in his weekly letter to the public on Tuesday (3 May), president Cyril Ramaphosa said that this would need to be done within the country’s constrained public finances, with the government already offering support through existing systems such as the R350 social relief of distress grant.

In February, the National Treasury said it was still considering proposals around a universal basic income grant for South Africa, but it maintained that it cannot be done in a fiscally irresponsible way.

Finance minister Enoch Godongwana said that, in view of the Covid‐19-related job losses and increasing poverty and inequality, Treasury and the government should seriously consider a basic income grant after the necessary consultations with relevant stakeholders.

These consultations were expected to yield some results by the time of the 2022 budget. However, Treasury said that it still doesn’t have an answer on a Basic Income Grant just yet.

“The Covid‐19 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.

“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.”

Source: https://businesstech.co.za/news/finance/583692/almost-half-of-all-south-africans-are-now-on-grants/