Additional R13.2bil boost to SA's social grants programme

Wednesday, February 11, 2009

Parliament - Finance Minister Trevor Manuel on Wednesday announced government's spending on social security would receive a R13.2 billion boost in 2009 to provide some measure of protection to poor South Africans during the economic slowdown.

Further to this, the extension of the child support grant to 15 years, will also take effect this year and the reduction in the eligibility age for old age grants for men to 60 is in progress.

Delivering his Budget Speech in Parliament on Wednesday, the minister said: "The budget adds R13.2 billion to the social grants programme. Strengthening our social security net [which supports 13 million people] is critical during this period when more poor families are vulnerable."

As of April 2009, the maximum values of the old age, disability and care dependency grants will rise by R50 to R1 010 a month, while the foster care grant and child support will also increase by R30 to R680 and R10 to R240 a month, respectively.

The minister highlighted that evidence pointed to the fact that the child support grant, which was available to parents who earned less than R2 300 a month and had a child no more than 15 years of age, had contributed significantly to a reduction in child poverty.

Government is, therefore, considering increasing the eligible age for the child support grant to 18 years of age, but this decision, Minister Manuel said, was subject to affordability.

The spending on social grants is tabled to increase to R80 billion for 2009/10, and will amount to about 12 percent of total government spending making South Africa one of the world's biggest social grants spenders.

According to National Treasury, consolidated expenditure on social protection has increased from R72.3 billion in 2005/06, which accounted for 4.6 percent of GDP, to a projected R118.1 billion in 2009/10, accounting for 4.8 percent of GDP.

"The largest adjustments to spending plans got to poverty reduction: R25 billion is added to the budgets of provinces, mainly for education and health care, and R13 billion for social assistance grants and their administration.

"R4 billion is added to the school nutrition programme and R2.5 billion goes to municipalities for basic services," the minister explained.

Creating lasting employment is another critical factor as the country heads for economic turbulence, said Mr Manuel.

The minister challenged participating departments, provinces and municipalities to exceed their targets for creating Expanded Public Works Programme (EPWP) jobs in the year ahead as the contingency reserve for 2009 has been increased to allow for additional funding of employment projects in the 2009 Adjustments Appropriation.

In 2008, the EPWP provided over one million temporary jobs, and Mr Manuel's 2009 Budget tables an amount of R4.1 billion for the roll out of the second phase of the EPWP.

Extension of the programme aims to increase the number of full-year equivalent job opportunities to over 400 000 over the next five years as well increase the duration of temporary jobs.

Proposals for this include longer-term public sector employment such as home-based care and community health services, which is directly funded by departments and supported by targeted training and skills development.

In light of the upcoming general elections, the minister told Parliament government will also be allocating funds to the Independent Electoral Commission (IEC) for 30 000 barcode scanners and 105 000 transparent ballot boxes.

"We are also budgeting R1.6 billion for South African Airways [SAA] to support its turnaround strategy, which included reducing costs and improving efficiency. I am sure that the House will agree with my hopes that this will not be a recurring allocation," said Mr Manuel.

The state airline, SAA, has been fraught with financial difficulties in the past with government having to come to the airlines aid on numerous occasions.