Maverick Citizen

BUDGET 2023

Grant increases not enough to counter skyrocketing food inflation, say civil society groups

Grant increases not enough to counter skyrocketing food inflation, say civil society groups
(Photo: Gallo Images / Sowetan / Sandile Ndlovu))

An estimated 18.3 million people live in extreme poverty in South Africa, but, say some in civil society, Finance Minister Enoch Godongwana’s Budget speech didn’t reflect any urgency to providing social protection through grant increases that cushion food inflation of 14%.

Finance Minister Enoch Godongwana might have said in his speech that “eradicating poverty, inequality, and unemployment is as urgent today, if not more so, as it was at the dawn of our democracy nearly 30 years ago”, but some civil society groups say his grant adjustments do little to tackle hunger and malnutrition.

The minister announced that the old age and disability grant increases to R2,090, with an additional R90 on 1 April and a further R10 on 1 October. 

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

“R66-billion is allocated to social development over the medium term, with R36-billion to fund the extension of the Covid-19 Social Relief of Distress grant until 31 March 2024. R30-billion will be used for inflation-linked increases for other social grants,” he said. 

The Budget Justice Coalition welcomed the increase in the child support grant, but noted: 

“The increase is far below food inflation, which in January had reached record levels of 13.4% compared with a year before. There will be another increase of R10 in October, bringing the amount to R510. While we are relieved that the CSG increase is higher than the R10 increase that was previously budgeted, the below-inflation increase will have serious consequences for children, who already suffer high rates of hunger and malnutrition.” 

Read Daily Maverick’s Budget coverage here

The Institute for Economic Justice has vowed to challenge the Budget, saying: “Treasury continues to tighten its chokehold on the grant and to act as an obstacle to the realisation of peoples’ constitutionally-enshrined rights. The Institute for Economic Justice (IEJ) demands that the SRD grant is adequately resourced in this year’s budget, to meet the level of need in South Africa. We will challenge any further erosion of the grant,” 

IEJ echoed sentiments around the SRD grant being insufficient and noted that the Finance minister gave no time or plan to the Universal Basic Grant.

The #PayTheGrants campaign has proposed a universal basic income grant of R1,500, saying the R350 Social Relief of Distress (SRD) grant is insufficient to meet the nutritional needs of recipients.

The SRD grant equates to roughly R11 a day, while a universal basic income grant would provide R50, but “even this is still insufficient because it is only one meal a day. The state might think this is expensive, but this is expected to feed a family, not just one person”.

Godongwana acknowledged the persistently high food prices and proposed a levy on diesel to reduce those prices for the consumer.

“To ease the impact of the electricity crisis on food prices, the refund on the Road Accident Fund levy for diesel used in the manufacturing process, such as for generators, will be extended to manufacturers of foodstuffs. This takes effect from 1 April 2023 for two years,” he said. 

‘For the rich’

Brett Herron, GOOD secretary-general, said the Budget is for the rich, and tax breaks and rebates for installing solar power will assist South Africans who have access to resources already. 

“This year’s Budget is reasonably good for the haves in society (no tax hikes, rebates for solar panels), but contains slim pickings for the have nots – no increase in the lamentable R350 poverty grant, no advance on a basic income grant, and no assistance to escape Eskom’s dismal performance,” he said.

“Furthermore, despite a commitment in the President’s State of the Nation Address that existing social grants will be increased to cushion the poor against rising inflation, the extra crumbs announced for childcare and old age pensions today insult our most vulnerable people.”

The National Education Health and Allied Workers’ Union condemned Treasury for below-inflation adjustments to the grants and no adjustment to the SRD grant. 

The union also bemoaned the Budget’s opposition to the “immediate and urgent implementation of the basic income grant”. 

“It is a disgrace to boast about the attainment of the primary budget surplus while depriving and plundering the poor into extreme and desperate levels of poverty,” it added. 

The union noted that the introduction of the SRD grant in May 2020 as part of the government’s Covid-19 response was a progressive step, but added:

“This grant is hardly an adequate means to address and reduce the scourge of extreme poverty that stalks this country. It is not even a means of survival as it is even less than half of the food poverty line, which is South Africa’s measurement of extreme or absolute poverty, against the backdrop of the unfolding cost-of-living and poverty crisis in which food and electricity prices are far outpacing headline inflation.” DM/MC

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