SA’s social grants: A tipping point for ‘political anarchy’?

While the social grant payment system may assist in putting food on the tables of millions of South Africans, it is not sustainable, according to industry experts.

According to GroundUp reports, every month the government spends over R22 billion on social grants, which is about 17% of tax revenue.

The majority of payments were to 13 million children with each receiving R500 per month and nearly four million older people receive R2 080 per month.

A further one million people with disabilities receive the same amount. More recently about 8.5 million people have been receiving the R350 per month social relief of distress grant.

However, as National Treasury calls for huge cutbacks, President Cyril Ramaphosa and his government need to decide whether to continue with the social relief distress grant or find other ways to cut costs.

University of North-West political analyst Prof André Duvenhage said SA had a very limited tax base with a very small percentage of people carrying a huge tax burden and on the other side was a socialist welfare state.

Duvenhage said close to 50% of the people were being paid by the state to do nothing which was “absolutely not sustainable”.

“We are running into severe trouble. If you look at the national debt, it was R500 billion in 2006 and then R4.7 trillion in 2022 and in 2025 will go up to R6 trillion. That is a situation running out of control,” he said.

Ramaphosa, in his address during the 2019 ANC Manifesto Review, noted that the ANC had expanded the social grant system in the country.

Ramaphosa said 18 million people received social grants and a further 10 million people received the R350 grant.

“Many people say they want the R350 to be increased and to continue. We hear our people and listen to that intently,” he said.

“I know of no government on our continent that supports its citizens in the way the South African government does.”

But many citizens said this was not something government should deem as an achievement.

Others believed social grants were one government system which must not fail as millions of South Africans depend on it.

Duvenhage said it was important to consider what the implications would be if government cannot pay social grants anymore.

“The country will erupt in violence and that will be a tipping point for political anarchy,” he said.

“But the government is using this to buy citizens because they know they need this for the 2024 elections and are 100%.

“This is basically misuse of state institutions and state money for party political gains.”

Duvenhage added that the social grant system was not a real achievement.

“It would be an achievement if there were 28 million jobs. We need to create jobs. We need to get people independent from the state. We need to build a strong civil society independent from state institutions.

“Unfortunately, we are going in the opposite direction and we are paying a huge price for it.

“A bigger political dispensation is not sustainable in this way and it’s going to end up in a very negative context, probably patterns of instability.”

At a meeting in Stellenbosch last week, National Treasury was reported to have told Ramaphosa and his ministers that government would have to make drastic decisions if it wants to continue paying the R350 social relief of distress grant.

Among the proposals presented by Treasury are to increase value-added tax (VAT) or close dozens of state programmes.

Independent economic analyst prof Bonke Dumisa said social grants were unsustainable.

“So government must start creating a conducive environment for the private sector to thrive and create jobs.”

Additional reporting by Gareth Cotterell.