Pietermaritzburg - Finance Minister Nhlanhla Nene’s Budget was condemned as “regressive” for poor and working class households, with fears raised that it would increase poverty.
Pietermaritzburg Agency for Community Social Action (Pacsa) on Wednesday said it was deeply disappointed at the tentative nature of Nene’s Budget.
The faith-based social justice and development NGO believes the Budget failed to take a stand on poverty and inequality.
Its director, Mervyn Abrahams, said the Budget also failed to convince South Africans of the government’s commitment to long-term sustainability.
“By failing to meaningfully increase social grants, the state has placed greater pressure on poorer households which depend on the state for social security.”
Abrahams said there were expectations of a much more “aggressive” Budget and individual and corporate taxpayers were girding themselves for belt-tightening. The minister “squandered” a prime opportunity to make a significant impact on the structure of the economy, he said.
“Instead, it is the poorest of the poor who are forced to tighten their belts.”
In particular, Pacsa was concerned that the child support grant has only been raised by R10 (R10 less than last year’s increase) to R330.
According to Pacsa’s research, social grants were mostly spent on food and electricity.
“We know from our work that children of poor households are not receiving sufficient nutritious food to ensure their healthy development. Our research shows that the cost to meet the most basic nutritional needs of a small child for a month is R486.58,” Abrahams said.
Pacsa’s research shows that the cost of a basket of food for a household of five is R2 711.29, while the cost of an average municipal service bill is R1 168.40.
The net result of the Budget was that, taking inflation into account, poorer households would have less money, it said.
“They will effectively regress rather than progress. This is not a Budget to reduce inequality; it will deepen poverty cycles and make it more difficult for households to climb out of poverty,” Abrahams said.