Cape Town - Finance Minister Enoch Godongwana has explained why there was no increase on the R350 social relief of distress grant since its introduction three years ago, saying there was budgeting that involved trade-off between priorities.
This after DA MP Alexandra Abrahams wrote to Godongwana asking for reasons why the National Treasury declined the Department of Social Development’s proposal to increase the monthly the grant from R350 to R420 for successful applicants when R1.769 billion was unspent and declared a saving for the 2022-23 financial year.
In his response, Godongwana said the budget process involved making many trade-offs, including between various priorities.
“As stated in the 2023 budget review, the extension of the Covid-19 SRD grant and the inflationary increases to social grants cost R65.3bn.
“Given the priorities and pressures facing the 2023 budget and medium-term expenditure framework, it is clear that there was (and is) limited fiscal space to accommodate the increase in the Covid-19 SRD grant values,” he said.
Godongwana also said under-spending or savings from the 2022-23 financial year did not go through the next year because of the large budget deficit.
“In addition, a broader agreement on the future of the Covid-19 SRD grant is required, including the financial implications of the proposed change, and how to finance it,” he said.
GOOD party MP Brett Herron also asked Minister of Social Development Lindiwe Zulu why the government failed to increase the R350 grant per month to cushion the poor against inflation.
Zulu said the government had been unsuccessful in its attempt to increase the value of the Social Relief of Distress grant due to fiscal constraints.
“The department is also concerned that since its implementation in 2020, the value has remained unchanged and is not keeping pace with inflation which directly translates to the value of the grant decreasing every year as the inflation increases,” she said.
Zulu also said her department approached the National Treasury with a proposal to increase the value of the grant, but the request was not favourably considered due to fiscal constraints.
“While the department appreciates that the grant has been extended to March 2024, it remains a temporary grant.
“An agreement on the future of the Covid-19 SRD has not as yet been reached, nor what should replace the grant when the temporary arrangement comes to an end.
“However, the department is currently exploring options to introduce a more sustainable permanent intervention aimed at addressing the needs of the working age population,” Zulu said.
Herron said since its implementation in 2020, the value had remained unchanged and was not keeping up with inflation.
“To put it simply, the value of the grant has been decreasing every year as the inflation increases, plunging families deeper into poverty and hunger every single day.
“Just this week, StatsSA reported the largest annual increase in food prices since 2009 after statistics reflected a jump of 14% over the past 12 months,” he said.
Herron also said the government had a constitutional obligation to provide citizens with the minimum needs to survive.
“We must not allow the government to avoid their constitutional duty while millions of South Africans are languishing in poverty.
“The Department of Social Development claims to be ‘exploring options to introduce a more sustainable permanent intervention’ for the working age population, yet the inaction and apparent lack of concern remains extremely concerning,” he said.
He said his party would continue to fight for a permanent Basic Income Grant to help the most vulnerable communities.
“Research showed that this is possible and can be done through reprioritisation if our leaders are serious about its implementation and a comprehensive overhaul of our social security programme,” Herron added.
Cape Times