Since the Social Relief of Distress (SRD) grant's implementation in 2020, it has been extended a few times while maintaining its value of R350.
As a result, there have been several calls from beneficiaries, lobbyists, organisations and even members of parliament to extend and increase the value of the R350 grant. While the SRD grant is due to come to an end in March 2024, there have been talks of it transforming to be a basic income grant.
Earlier this year, Social Development Minister Lindiwe Zulu revealed that her department completed and consulted on the draft policy on Basic Income Support, as a pathway to address the long-term income needs of vulnerable working age individuals.
Major sacrifices for grant extension
However, according to media reports, National Treasury told President Cyril Ramaphosa and his ministers that the government faces unprecedented revenue and spending pressures.
The financial pressure is a result of a challenging economic position because of extensive load-shedding, sticky inflation, and poor growth. Treasury noted that if the government wanted to keep the R350 SRD grant as is, it will only be able to afford it by finding other ways to cut costs.
Among the proposals presented by Treasury are to increase value-added tax (VAT) or close dozens of state departments and programmes.
Claude Naiker, Public Servants Association National Manager, says there has been a circular going around to all government departments on cost containment measures.
Naiker says some of the severe measures include, Treasury proposing to stop any more recruitment processes within state departments.
VAT increases
According to the report, if the government wants to keep the R350 SRD grant going, it will need to raise R42 billion this year. This would require VAT to be hiked by 1% or 2%, respectively.
The increases in VAT, which would supplement the money needed to continue paying the SRD grants, would help relieve pressure on government, but it would add to the strain felt by all South African citizens.
Closing state departments
It was suggested that the Department of Sport, Arts and Culture be incorporated into the Department of Basic Education. The Department of Tourism meanwhile could merge with the Department of Trade, Industry, and Competition.
Furthermore, the Department of Public Works and Infrastructure could close, meaning other government departments will have to manage their own assets.
“I think this is only going to cause more problems,” Naiker stressed.
There's already no investment in public works infrastructure that has been for some time, and if the government is proposing that only important projects and departments remain, the fact is that all the projects in the public sector is important.
SRD grant increase calls continue
Meanwhile, ANC Youth League (ANCYL) president Collen Malatji says unemployed graduates should be given a monthly grant of R4,500. Malatji was speaking as the ANC Youth League celebrated its 79th anniversary in KwaMhlanga over the weekend.
He stressed:
We are saying while young people are still looking for opportunities, there must be a grant that is provided for them to be able move around and look for those opportunities.
Malatji further noted that the current R350 Social Relief Distress Grant should be increased to R1,500 per month. "While we are still looking for solutions, the R350 must be increased to R1,500 until those issues are resolved,” he explains.
Unemployed graduates must be paid R4,500 a month, the youth looking for other opportunities must be paid R1,500 a month until the unemployment [issues] are resolved.
Should Treasury’s suggestions materialise, the call for such grant increases is simply unaffordable for South Africa, even despite the need being prevalent.
