People queue at Durban Central Post Office for the R350 Covid-19 social relief grant. Picture: Nqobile Mbonambi African News Agency( ANA)
People queue at Durban Central Post Office for the R350 Covid-19 social relief grant. Picture: Nqobile Mbonambi African News Agency( ANA)

Bid to extend Covid-19 social grant gets green light

By Vernon Mchunu Time of article published Jan 26, 2021

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Durban - CALLS by civil society for the extension of the Covid-19 social relief grant moved a step closer to reality after the ANC national executive committee (NEC) proposed that the poverty alleviation measure be extended beyond the end of this month.

Since President Cyril Ramaphosa announced the adjusted level 3 lockdown regulations, civil society organisations and political parties have called for the continuation of the grant, saying it would go a long way towards addressing high levels of poverty and spiralling unemployment.

“In the context of the continuing Covid pandemic, we need to consider the extension of basic income relief to unemployed people who do not receive any other form of state assistance,” said Ramaphosa in his closing remarks after the weekend-long strategic meeting of the ANC NEC.

“This (the extension as per the decision of the lekgotla) would depend on the state of public finances, and that there should be a clear exit strategy,” he added.

ANC spokesperson Nhlakanipho Ntombela said the undertaking of the NEC, which is the highest decision-making structure of the organisation between national conferences, would be brought to the Cabinet for further deliberation and adoption, before Ramaphosa made an official announcement about it

in the State of the Nation Address next month.

The details would then be unpacked by Finance Minister Tito Mboweni during the Budget speech, also taking place next month, said Ntombela.

According to a South African Social Security Agency’s presentation to Parliament in December last year, the 6.6  million applications for this grant as recorded in May spiked to 9.3  million in October.

Social Development spokesperson Lumka Oliphant said the department was in full support of the grant.

“Currently, policy proposals are under way and consultations have been held with various stakeholders. Key factors to be considered include costing of the amount to be provided, funding sources and the phasing of implementation,” Oliphant said.

Black Sash national advocacy manager Hoodah Abrahams-Fayker said the non-governmental organisation expected Ramaphosa’s announcement to be followed by a government confirmation and implementation of the extension.

“Caregivers who receive the child support grant must also be eligible for this grant. The economic crisis, exacerbated by the Covid-19 pandemic, will not be resolved by January  31, when the Covid-19 social relief of distress (SRD) grant is meant to end,” he said.

The NEC’s resolution coincided with a call by the Covid-19 People’s Coalition for an urgent meeting with Ramaphosa this week in a bid to avert the imminent termination of the grant payment.

“We were pleased that the government responded to our call in part and extended the SRD grant, but were disappointed that the same was not done for caregivers who are mostly black women and have borne the brunt of this pandemic.

“Further, we are now in a worse position given the deadly second wave. Numbers of new applicants have continued to rise, despite the hard lockdowns (of last year) having been lifted, which demonstrates that the need continues to be greater,” the coalition wrote to Ramaphosa.

The coalition demands, among other things, an increase of the R350 to “at least the food poverty line of R585 per person per month”; an alleviation of the harsh and narrow criteria for accessing the grant; caregivers to be paid the grant regardless of any child support payment they may be receiving; and an urgent progress towards implementation of the “long overdue” Basic Income Grant (BIG) for people aged 18 to 59.

“While the country mourns the insurmountable loss of human life, we must do everything in our power to ease the difficulties of millions of South Africans who are relying on these grants. We have to work with the government to avert a humanitarian crisis that will ensue if the grant is terminated,” coalition spokesperson Lynette Maart said.

University of Zululand-based economist Professor Irshad Kaseeram said the adjusted level 3 lockdown, which resulted in an alcohol sales ban and people staying at home due to a spike in second wave infections, meant that there was a marked decrease in seasonal and permanent employment, which thus made sense for the government to offer basic income relief to the unemployed.

However, Kaseeram was quick to caution that the country could not afford a long-term grant payment.

“Affordability is a huge issue, in short it is unaffordable. At the moment our debt is at 81.8% of GDP. For an economy such as ours, it ought to be around 30%, hence the series of downgradings by ratings agencies over the past two years.”

He thought it likely that the relief would be temporary, until herd immunity was reached.

“Then monies will be taken from the Solidarity Fund, which is supposed to be still gathering funds to assist the vulnerable.

“Further such payments coming from the government puts us in a precarious position of a further ratings agency downgrade in the near future.”

Stellenbosch University economist Professor Ingrid Woolard said that everyone supported the idea of extending the grant as a short-term emergency relief measure. She raised concern that the Basic Income Grant, first recommended in 2002 by the Cabinet-commissioned Taylor Commission, had not seen the light of day.

“There doesn’t seem to be any political will to move towards implementation. Our rough estimates are that a modest BIG of R500 a month to eligible adults would cost R90  billion a year.

“We currently spend about R187bn a year on social grants, so this would mean increasing the social grants budget by about 50%.

“Unemployment relief is intended as a short-term measure. The policy goal needs to be to directly address the problem of structural unemployment. How do we become an economy that absorbs greater numbers of people into the labour market?”

The Mercury

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