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Good news from the MTBPS: The R350 grant extended by another year

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Finance minister Enoch Godongwana has set aside R34 billion for the extension of the social relief of distress grant (SRD) until March 2025, but stressed that there is nothing beyond that period.

Godongwana delivered his Medium-Term Budget Policy Statement in Parliament on Wednesday, and he said the National Treasury has moved to allocate an additional R34 billion to aid the continuation of the programme for another year.

The much-contested grant was supposed to come to an end next year, but the extension pushes that back to March 2025.

Godongwana said the Treasury noted that the extension over the medium term represents a temporary solution in the wake of the government’s review of the entire social grant system.

Labour Unions have been calling for the introduction of a basic income grant to replace the temporary grant introduced in the wake of COVID-19 pandemic.

R34 billion is allocated to extend the Covid-19 Social Relief of Distress grant by another year. Over the medium term, a provisional allocation is retained while a comprehensive review of the entire social grant system is finalised, he added.

The R350 monthly grant, which was implemented in 2020, came into existence as a temporary provision to mitigate the effects of the Covid-19 pandemic on low-income South Africans millions of whom lost their jobs or their small businesses during a two-year period of lockdowns.

As it stands, the Treasury has revised its social protection bill upwards to R280.1 billion for 2023/24, with expectations being that expenditure will continue increasing over the medium term and peak at R326.9 billion in 2026/27.

Social protection is one of the major expenditure items on the government’s R1.16 trillion revised social wage bill for 2023/24.

Despite the move to extend the grant, the Treasury does not seem keen to keep the grant around for much longer.

In MTBPS, the Treasury noted that because the fiscal environment has weakened considerably since the Budget review in February, the government will need new revenue sources or reprioritise other spending items to continue offering the support.

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