In his first medium-term budget statement, Minister of Finance Enoch Godongwana made no mention of extension of the 350 srd income grant, instead emphasizing that South Africa currently spends R1.1 trillion on grants while grappling with an R4 trillion government debt.
He did, however, add that a decision on the government's initiatives to extend the social security net will be included in the February 2022 Budget. Cabinet will make the decision on the BIG. Godongwana stated that initiatives to enhance social grant support should be weighed against pre-existing government objectives that remain underfunded, such as basic services, education, and healthcare. While the Covid-19 outbreak has heightened public debate about the idea of a universal basic income award, Godongwana believes that any social safety scheme should complement a "vibrant job-creating economy."
In the absence of quicker job-creating development, it is critical to continue social protection. Any plans to extend this system should satisfy the test of sustainability and effectiveness by being fully and adequately funded to ensure that the fiscal balance does not deteriorate, said the medium-term budget policy statement (MTBPS), which was issued in a joint session of Parliament. Given the state of the public finances, additional expenditure obligations can only be paid by either eliminating existing programs to free up income or increasing revenue collection permanently. New tax ideas must also be evaluated in terms of their revenue-raising potential and broader implications on the economy.
Following the devastating impact of the Covid-19 pendemic on South Africans' livelihoods, the government has indicated that it is exploring a comprehensive basic income handout . Some pundits have claimed that significant tax increases would be necessary to pay it. The present social relief of distress award (SRD) will expire in March of next year, having been disbursed to 9.5 million South Africans. With the award, the overall number of welfare grant recipients reached 27.8 million, or 46 percent of the population. The government now spends R1.1 trillion each year on grants. Minister of finance suggest job creation to replace the 350 grant as he mentioned that government has no budget for the 350 srd.
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