‘No pressure to increase taxes for Budget’s R350 grant’

Published Feb 23, 2023


Cape Town - There would be no pressure to increase taxes to raise funds to accommodate the R350 grant in the Budget ahead of the 2024 general elections.

This was the view of Finance Minister Enoch Godongwana on Wednesday in reply to media questions at a briefing prior to his delivery of the 2023 Budget.

The Budget he tabled extended the R350 grant until March 2024.

“The Budget for an election is this one, 2024 is too late to deal with elections.

“Now, if you are saying we will have pressure to raise taxes next year for this election, I don’t think so,” he said.

Delivering his Budget, Godongwana said R66 billion was allocated to social development over the medium term with R36 billion to fund the extension of the Covid-19 Social Relief of Distress (SRD) grant until March 31, 2024.

R30 billion will be used for inflation-linked increases for other social grants, he said.

“The old age and disability grants increase by R90 on April 1, 2023 and a further R10 on October 1, 2023. The result is a total increase to R2 090.

“The child support grant rises from R480 to R510 on October 1, 2023, while the foster care grant increases from R1 070 to R1 130 over the same period.”

In his Sona, President Cyril Ramaphosa said the R350 grant would continue and existing social grants increased to cushion the poor against rising inflation.

“Work is under way to develop a mechanism for targeted basic income support for the most vulnerable, within our fiscal constraints,” he said.

Ramaphosa had also said the National Treasury was considering the feasibility of urgent measures to mitigate the impact of load shedding on food prices.

On Wednesday, Godongwana said R23 billion would be allocated to health and R22 billion to basic education to cover the shortfall in compensation budgets and to improve services.

A further R8 billion was allocated for basic services via the local government equitable share.

National Treasury acting director general Ismail Momoniat said the social wage continued to receive the bulk of public resources via the Budget. “Prudent fiscal management and well-considered trade-offs must be important features of future budgets.”

The National Treasury’s budget review document said additions to the expenditure were designed to ease conditions for economic activity and cushion poor households from weak economic growth.

“Apart from the one-year extension of the Covid-19 SRD grant, additional allocations prioritise education, health, safety and security, and infrastructure-related spending.”

“The Budget will boost public investment, with budgets for buildings and fixed structures growing on average by 18.9% annually over the MTEF period.”

The Budget document said social development was allocated R1.1 trillion over the MTEF period for social grants, welfare services and to strengthen advocacy for the empowerment of women, youth and people living with disabilities.

The expenditure on social grants will increase from R233 billion in 2022/23 to R248.4 billion due to the increase in number of recipients and the value of the grants, excluding the R350 grant.

The SRD grant was allocated R35.7 billion until March 2024 and R400 million was set aside for Sassa to administer it.

“The government is still considering alternatives for social protection for the working age population that can replace or complement the current grant.”

Cape Times