Business Unity Says Basic Income Grant Will Have Huge Drawbacks, the Grant May Cost SA R958 Billion

Business Unity Says Basic Income Grant Will Have Huge Drawbacks, the Grant May Cost SA R958 Billion

  • Different business organisations have made estimates of how much the Basic Income Grant will cost South Africa
  • They have estimated that the grant could cost anywhere between R68 billion to R958 billion per year
  • Business Unity South Africa says the implementation of the grant could lead to South Africa being forced to make budget cuts in crucial areas

PAY ATTENTION: Click “See First” under the “Following” tab to see Briefly News on your News Feed!

JOHANNESBURG - Business Unity South Africa says the governments plan to establish a Basic Income Grant in South Africa is merely unaffordable and will have huge drawbacks on the country's economy.

The organisation stated on Monday that the implementation of the grant result in the government making budget cuts in key areas.

Basic Income Grant, South Africa, Business Unity
Barclays Research estimates that the Basic Income Grant could cost South Africa R958 billion per year. Image: Getty Images
Source: UGC

In the statement issued by BUSA, the business body stated that given the potential expense of the Basic Income Grant, the adoption of the grant needs to be done carefully, reports Fin24.

Read also

Telkom says Netflix deal will not be renewed for its smart TV device

The organisation also stated that the grant should primarily focus on helping out people from impoverished backgrounds.

Enjoy reading our stories? Download the BRIEFLY NEWS app on Google Play now and stay up-to-date with major South African news!

Business organisations estimate how much BIG will cost South Africa

Different organisations have tried to calculate how much the grant would cost the country as the true cost of the grant is yet to be established.

The Financial and Fiscal Commission estimates that the adoption of the grant could cost the country R243 billion per year. The estimate was made using the R350 Special Covid 19 grant that was paid out to South Africans per month and the country's population in 2020.

BUSA put the estimation of the grant to be anywhere between R68 and R300 billion per year.

The Barclays Research has estimated that the grant will likely cost R958 billion per year, according to a report by MyBroadband. This estimation was made by assessing the National statistics agency’s poverty level adjusted for inflation.

Read also

Almost R45b worth of pension funds in SA’s retirement industry lie unclaimed

Barclays Research says this amount can go down considerably if the number of people who qualify for the grant is brought down as well as if the amount set to be paid out was cut.

Government gives Basic Income Grant the green light despite push back

Briefly News previously reported that talks of a Basic Income Grant for South African citizens have intensified in the past few months with some organisations being for the implementation of the grant and others warning that introducing the grant will be bad for the country.

It seems, despite warnings from Finance Minister Enoch Gondogwana that the country's budget is a little tight, the South African government plans to move ahead with the grant.

Minister in the Presidency Mondli Gungubele said in a television interview that the African National Congress has come to the consensus that a basic income grant is necessary for South Africans and they are currently exploring the best ways to implement it, according to Business Tech.

Gungubele stated they are aware of the fiscal challenges South Africa faces, however, the ruling party says these challenges should not stop them from trying to find a way to implement the grant.

Source: Briefly.co.za

Online view pixel