Finance minister Tito Mboweni says Treasury will need at least R27 billion to reinstate the R350 Covid-19 Social Relief of Distress (SRD) grant.
In a media briefing on Wednesday (28 July), Mboweni said that this amount will see the grant extended until the end of March 2022.
While the cost is high, especially with the added burden of the recent looting and unrest, Mboweni said that the extended grant was necessary.
“This R350 no matter how small it might be goes a long way in assisting our people. It will cost R27 billion, which we have to find in the system,” he said. “We are in a position that we can afford this R27 billion up to the end of March.”
Mboweni added that Treasury projections now show that South Africa is likely to only return to pre-covid economic levels by 2023, with an estimated R15 billion in damage caused by looting and unrest in Durban in eThekwini alone.
President Cyril Ramaphosa announced the reintroduction of the R350 Social Relief of Distress (SRD) grant on Sunday (25 July) as part of the government’s relief measures around Covid-19 and the recent social unrest.
While the grant is set to remain in place until March 2022, the president has also recently said that the government is considering the feasibility of introducing a permanent basic income grant.
No matter where the money comes from – it will come at a cost
Trade union Solidarity has warned that making available more funds to be able to afford the R350 allowance for the unemployed is unsustainable and will put more pressure on the economy and increase the burden on the whole of South Africa.
The larger than expected tax revenue is still less than what is needed to balance the ordinary budget of the state and can rather be used for that, the union said.
“What the government is doing with its support packages is to keep people alive on debt instead of creating a better future for them,” said Theuns du Buisson, economics researcher at Solidarity.
“What it should rather do is enable people to thrive. This can only happen if the right climate is created where an economy can grow so that jobs can be more readily available.”