Medium-term budget: Will the R350 SRD grant be extended?
In 2022, Godongwana said no final decision has been made about a replacement of the R350 SRD grant or how it would be financed.
The fate of the R350 Social Relief of Distress (SRD) grant hangs in the balance, and Finance Minister Enoch Godongwana is set to announce whether the social grant will continue or not when he delivers the Medium-Term Budget Policy Statement (MTBPS).
Godongwana will deliver the Medium-Term Budget Policy Statement (MTBPS) to the Members of the National Assembly on Wednesday, 1 November, at 14:00 at the Cape Town City Hall.
WILL THE R350 SRD GRANT BE EXTENDED AGAIN?
The SRD grant, which was originally introduced in May 2020 to help poor households at the height of the pandemic, has been extended before. Earlier in 2022, President Cyril Ramaphosa said the grant would come to an end in March 2023 and it was extended to March 2024.
When he delivered his Medium-Term Budget Policy Statement in 2022 Godongwana said discussions about the R350 SRD grant’s replacement are still underway.
Godongwana said the future of the grant and its replacement would require “very difficult” trade-offs and financing decisions.
“Despite the provision made in this budget, I want to reiterate that any permanent extension or replacement will require permanent increases in revenue, reductions in spending elsewhere, or a combination of the two,” he said.
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In February this year, President Cyril Ramaphosa also reiterated that work is underway to develop a mechanism for targeted basic income support for the most vulnerable aside from the Social Relief of Distress (SRD) grant.
“Work is underway to develop a mechanism for targeted basic income support for the most vulnerable within our fiscal constraints.
This will build on the innovation we have introduced through the R350 SRD Grant, including linking the data that we have across the government to make sure we reach all those who are in need,” he said.
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MORE BUDGET CUTS ON THE CARDS
As previously reported by The South African, the country’s finances are in a dire state as tax collection is approximately R22 billion short of government predictions, according to Daily Investor. Ironically, R22 billion is the exact number government spends to service social grants every month, or 17% of tax income.
Consequently, the fate of SASSA SRD grants hangs in the balance as government can only afford to keep them going by either making major cutbacks or increasing VAT by two percentage points. The latter option looks unlikely in the build-up to the 2024 national elections.