AfriForum rejects proposal to increase Covid-19 grant threshold to R624

The civil rights organisation AfriForum on Thursday submitted its written comments rejecting the proposed amendments to regulations, which increase Covid-19 grants.

The department wants to increase the maximum allowable income from R350 to the food poverty line of R624.

Afriforum highlights two main issues with the proposal

1) This would result in many more people qualifying for the grants, something that will put the already constrained fiscus under even more pressure.

2) The regulations would empower the health and finance ministers to further amend the income threshold from time to time.

“The organisation has deep sympathy for the millions of people in the country who live in poverty.

However, poverty is caused by government failures which have led to a 46.2% unemployment rate and the payment of allowances to 46% of the population,” said AfriForum‘s Campaign Officer for Strategy and Content, Reiner Duvenage.

Taxpayer burden

“The existing grants are financed by an extremely thin tax base of which just over 5% of taxpayers are paying 91.8% of taxes,“ stressed Duvenage.

Afriforum insists that increasing the income threshold for Covid-19 allowances will not solve the country’s poverty problem.

But, even if the amendments are ratified, citizens who qualify for the allowances would still find themselves far below the upper poverty line of R1 335 per month.

There are also concerns the temporary reprieve would not be sustainable as these grants would make the population even more dependent on the government.

“South Africa is considered to be on the brink of a “fiscal cliff”. This means that interest or government debt, civil service salaries and social grants amount to more than the government’s total income,” said Duvenage.

Empower the private sector

Afriforum is lobbying for the government ‘to create a favourable situation for the private sector to generate jobs, and therefore, wealth.

“By paying grants to almost 50% of the population, the government is trying to take over the role of the private sector.”

“AfriForum’s comments, therefore, request the government to stop its excessive involvement in the economy and give the private sector the freedom to ensure real progress and prosperity together with communities,” concludes Duvenage.

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