Basic income grant is a recipe for financial disaster

The ANC is inordinately proud of the fact that just under 20 million South Africans receive some kind of social grant from the government.

While it is praiseworthy that action is being taken to alleviate dire poverty, the more pertinent question of why so many are sinking into poverty is ignored.

The answer would, inconveniently, be that so much money has been looted by the governing party that there is not nearly enough to help stimulate the economy and everyone is slowly falling into the abyss.

Now, with the 2024 elections looming, the party is talking up the idea of a basic income grant of at least R600 a month. Another great vote-grabber, we are sure … but one which could deal the death knell to our ailing economy.

ALSO READ: Basic income grant almost certain to mean higher personal tax and VAT

Analyst Intellidex predicts that, to cover the cost of the grant – estimated at between R20 billion and R2 trillion a year – income taxes as well as VAT would have to be raised. And we’re already in the top 25 of the world’s highest taxed people.

This will result in further emigration of skilled taxpayers, who would pay less tax and get more for it, than they do here. Such a grant could be a recipe for financial disaster.