Almost all South Africans now need financial support from the government, says the Department of Social Development.
In a presentation to parliament this week, the department said around 31% of the South African population rely on social grants, which include everything from disability to childcare.
However, there are around 10 million beneficiaries who depend on the R350 monthly special grant for social relief in the event of a Covid-19 emergency alone.
This increases the number of South Africans dependent on social transfers at around 47%he said.
Data from Bloomberg and Old Mutual show what the country currently has twice as many welfare beneficiaries as registered taxpayers. The government is now considering introducing a basic income subsidy in South Africa, which should further expand the social safety net.
Writing in his weekly letter to the public on Tuesday (May 3), President Cyril Ramaphosa said this should be done within the country’s limited public finances, with the government already offering support through existing systems such as the R350 social. relief of distress grant.
In February, the National Treasury said it was still evaluating proposals around a universal basic income subsidy for South Africa, but he said it can’t be done in a fiscally irresponsible way.
Finance Minister Enoch Godongwana said that in view of Covid-19-related job loss and rising poverty and inequality, the Treasury and the government should seriously consider a basic income grant afterwards. the necessary consultations with interested parties.
These consultations should have produced some results by the 2022 budget. However, the Treasury said it still has no answer on a basic income grant.
“The Covid-19 pandemic has heightened the national debate on the possibility of a universal basic income subsidy and the government is considering various proposals in this regard,” he said.
“Any proposal to expand this system must be fully and adequately funded by closing existing programs to free up revenue or through permanent increases in revenue collection.”