The civil rights organisation AfriForum has on 28 July 2022, submitted its written comments rejecting the proposed amendments to regulations, which increase Covid-19 grants. These amendments first propose that the income threshold to qualify for the monthly R350 Covid-19 allowance is increased from R350 to R624. Resulting in many more people qualifying for the grants. Second, the regulations give the ministers of health and finance the power to further amend the income threshold from time to time.
In the comments, AfriForum emphasizes that the organisation has deep sympathy for the millions of people in the country who live in poverty. However, AfriForum emphasizes that the poverty is caused by government failures which have led to a 46.2% unemployment rate and the payment of allowances to 46% of the population.
These grants are financed by an extremely thin tax base of which just over 5% of taxpayers pay 91.8% of taxes
“The expansion (increase) of Covid-19 allowances is not a solution to poverty, because citizens who qualify for the allowances still find themselves far below the upper poverty line of R1 335 per month. Furthermore, the payment of these grants makes the population even more dependent on the government, which due to the country’s catastrophic fiscal position cannot sustain these expenses in the long term,” says Reiner Duvenage, Campaign Officer for Strategy and Content at AfriForum.
South Africa is considered to be on the brink of a “fiscal cliff”. This means that interest or government debt, civil service salaries and social grants amount to more than the government’s total income. Thus, AfriForum argues that the further expansion of Covid-19 grants is entirely unaffordable.
“The government’s only role is to create a favourable situation for the private sector to generate jobs, and therefore, wealth. By paying grants to almost 50% of the population, the government is trying to take over the role of the private sector. AfriForum’s comments therefore request the government to stop its excessive involvement in the economy and give the private sector the freedom to ensure real progress and prosperity together with communities,” concludes Duvenage
Read the original article in Afrikaans on AfriForum