South Africa has run out of options, say economists

THE debate on the social safety net has shifted since the July unrest – and there is now broader agreement that extreme poverty and inequality can lead to future episodes of damaging instability, say economists at Old Mutual Wealth.

In a research note this week, the group noted that the debate around additional financial support has moved on from whether it needs to be implemented to how the country and the government can do it.

“Some argue for a basic income grant, while the finance minister has reiterated that he would rather expand measures that encourage employment – such as youth employment subsidies and public works,” said Old Mutual Wealth.

“Either way, it will have to be accommodated by changing government spending or raising taxes, or both. We cannot bank on commodity price windfalls every year.”

The government has long promised to address its rising debt burden by slowing