Discussions on introducing a basic income grant still ongoing – Godongwana

Amid growing calls for government to implement a basic income grant (BIG), Finance Minister Enoch Godongwana says discussions about increasing the social safety net are still ongoing.

The minister on Thursday tabled his maiden Medium-Term Budget Policy Statement (MTBPS) in the National Assembly.

He said the details on government’s interventions with regards to the social security net and the BIG would be provided in the February 2022 Budget Speech.

“Let me however reiterate that a permanent solution in responding to these challenges is to achieve high and sustained levels of economic growth,” Godongwana said.

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Unions and civil society organisations were expecting the minister to make pronouncements on the BIG during the MTBPS due to South Africa’s high unemployment rate (34.4%) and the impact of the Covid-lockdowns on job creation and retention.

To deal with increasing levels of joblessness, especially among the youth, government introduced the Social Relief of Distress (SRD) grant, also known as the R350 grant.

Godongwana said the SRD grant had benefitted about 9.5 million South Africans and would come to an end, as planned, in March next year.

Spending on social grants

Godongwana said 27.8 million citizens were social grant recipients, which represented about 46% of the population.

He said the number of unemployed people underlined the critical flaws in the local economy and government was pushing ahead with structural reforms to address this.

“Our total spending on the social wage is also very high. This amount has grown from R860 billion in 2018-2019 to R1.1 trillion in 2021-2022.

“Around 60% of total non-interest spending annually goes towards housing development, free basic services, employment programmes, health, education and social grants, among other things,” Godongwana said.

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