Government’s economic support package to cost around R36 billion – Mboweni

Finance Minister Tito Mboweni on Wednesday announced that the government’s total economic package, to assist struggling citizens and businesses devastated by the pandemic and the recent civil unrest, would cost taxpayers about R36 billion.

Mboweni briefed the media after President Cyril Ramaphosa’s announcement on Sunday to move the country to lockdown level 3.

The minister said the reinstatement of the R350 social relief of distress grant (SRD) would cost around R27 billion.

“This R350 grant, no matter how small it might be, it goes a long way to assisting our people,” Mboweni said.

The SRD grant would continue to be paid out until the end of March 2022 and was extended to eligible unemployed caregivers who currently receive a child support grant.

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Mboweni added that he could not say whether the grant would be extended beyond March 2022, but discussions were continuing in government.

Sasria

He said state-owned insurance company, Sasria – together with other insurance companies – were speeding up their damage assessment processes to pay out claims to businesses affected by the unrest in Gauteng and KwaZulu-Natal.

“And we anticipate that this will cost maybe R15 billion-R20 billion, which between Sasria and the National Treasury we’ll have to make sure that these are met.”

Mboweni said Treasury projected the country’s economy to recover to pre-Covid levels by 2023.

He said an additional R250 million would be allocated to the South African Police Service (Saps) to help them in operations in communities affected by the violence. The deployment of the South African National Defence Force (SANDF) would cost R700 million.

Mboweni added that the extension of the UIF’s Temporary Employee-Employer Relief Scheme (TERS) would cost government around R5.3 billion.

No borrowing money

Treasury director-general Dondo Mogajane said government would not borrow money to fund the package, but would approach Parliament to approve the budget adjustments.

“We are not going to be going for borrowing at all. I think that must be clear. This is not, in anyway, going to include or increase our borrowing requirements,” Mogajane said.

He said Treasury reprioritised about R1 billion from the budgets of the Department of Small Business Development and Department of Trade, Industry and Competition (DTIC) towards the economic package.

“The total package in supporting businesses from DTIC and small businesses totals an amount of R2.3 billion that is there, so there is an extra R1.3 billion that will go towards that,” he said.