The Social Relief of Distress (SRD) R350 grant was introduced during the Covid-19 pandemic and subsequent lockdowns. These lockdowns erased the prospects of unemployed individuals finding a job.
The grant benefits more than 10 million people every month, with around 5 million people submitting applications for the grant but are deemed undeserving by the South African Social Security Agency (Sassa).
Several civil organisations and political parties, including the South African Communist Party (SACP) have called for the grant to be made permanent. The National Treasury however warned that they cannot commit to a new permanent expenditure without a matching permanent increase in revenue.
Economist Duma Gqubule explained that the grant is not a permanent solution to the unprecedented levels of unemployment but rather to the unprecedented levels of poverty in South Africa.
According to statistics from the Pietermaritzburg Economic Justice and Dignity Group (PMBEJD), the Food Bound Poverty Line (FPL) is at R624 per month. Around 25.2% of people in South Africa live below the FPL which translates to 13.8 million people.
Gqubule adds that we therefore cannot ask people to wait for the government to provide employment, as millions of people are going to bed hungry.
He adds that the R350 grant is not linked to an objective measure of poverty. He believes that grants should be increased at least to the FPL which stands at R624 per month.
Basic Income Grant
The Department of Social Development (DSD) has also investigated the implications of a Basic Income Grant (BIG).
Last year a panel of experts appointed by the DSD recommended that a BIG should be introduced in South Africa.
The panel’s chair, Professor Alex van den Heever says that if a BIG was introduced carefully, it would not result in major trade-offs concerning existing social support mechanisms, economic sustainability and the fiscal position of the government.
According to stakeholders, President Cyril Ramaphosa is committed to further engagements around the topic of a BIG.
Gqubule said the implementation of a BIG would bring a higher economic growth rate than what would be expected if the stimulus was not introduced. He added that it will also create a few million jobs during the period of implementation.
“We have to address all of these things simultaneously, unemployment, the poverty and the inequality and the very many ways in which we can do that if the government was prepared to listen to lots of proposals that have come from many economists [and] civil society organisations but the government is not interested in listening to these proposals” concluded Gqubule.
