Chief economist of the Efficient Group Dawie Roodt predicts that President Cyril Ramaphosa will be expanding the R350 social relief and distress grant during the State of the Nation Address (Sona).
Roodt said it may also become a permanent feature in the country or it could eventually be replaced by a basic income grant. The economist pointed to politicians as the source of the push to improve the social safety net in South Africa to include many unemployed adults.
Roodt said the country has 30 million people receiving grants from the state out of a population of less than 65 million, while only 12 million work in the private sector.
“That’s simply unsustainable, and looking at the fiscal accounts of the state, it is very clear that we are heading for serious financial difficulties. We have to reduce these grants. The only solution to this is to get the economy to grow, but unfortunately the kind of policies that we have from this government will not lead to growth.”
According to Roodt, there is nothing as permanent as a state’s temporary expenditure, and these grants are evidence of that.
Roodt said the grants cannot be removed because when you give people money you cannot stop, lest they get angry and burn things down.
BUSINESS REPORT ONLINE