Economists warn that SA cannot afford to pay out R350 grant forever

Economists warn that SA cannot afford to pay out R350 grant forever

- Economists have warned that South Africa cannot afford to pay the R350 SRD grant for a longer period of time

- The grant was introduced as part of the R500 billion package to provide economic and social relief from the COVID-19 pandemic

- A number of South Africans have called for the grant to continue being paid out as it has been assisting them

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Economists have come out and said that South Africa cannot afford to pay the R350 grant permanently. The South African Social Security Agency (SASSA) introduced the Social Relief of Distress (SRD) grant to fight the economic effects of COVID-19. The SRD grant is specifically for people who are unemployed, over the age of 18 and not receiving any other social grant.

The grant has been paid out for people who applied and were approved since June and is set to end in October. The SRD grant is part of the R500 billion economic and social support package.

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There has been a call from a number of South Africans for the grant to continue being paid out beyond the time that was allocated. This is because of the high rate of unemployment in South Africa.

Thando 6

Going forward with the SRD grant permanently may have economic consequences. (Photo by Gallo Images/Roger Sedres)
Source: Getty Images

Earlier this week, Minister of Social Development Lindiwe Zulu said that her department had proposed to continue paying out the grant until the end of the financial year.

“There is support from the ruling party and we believe the state has the capacity, but we have to be creative about this. The team of expert and engagement are on an advanced stage about the basic income grant,” said Zulu during a television interview.

However, some economists have warned that there is no country in the world that could afford to do this permanently.

Economist Mike Schussler said: "In order to afford this, the government would have to increase income tax by 12% while VAT increased by at least 2%."
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Paying the grant indefinitely would not be sustainable and would force the government to borrow money.

In other news, Briefly.co.za previously reported that MK Vets want Fikile Mbalula arrested for the state of the train service. The Gauteng Umkhonto we Sizwe Military Veterans Association (MKMVA) has made it clear, they want the Minister of Transport Fikile Mbalula arrested for allowing the train service to fall into disrepair.

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Source: Briefly.co.za

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