In a move that is causing ructions in government, Finance Minister Enoch Godongwana is set to propose that the Covid-19 social relief of distress grant be terminated and replaced with a “family grant”.

Government insiders say the proposal will be one of the major announcements in Godongwana’s first medium-term budget policy statement, which will be presented to Parliament on November 11. Sharp differences regarding the proposal are said be the real reason for the postponement of the mini budget speech by a week, rather than the stated reason of proximity to the local government election date.

City Press has learnt that the proposed family grant would only be given to the head of a family household, thus excluding most of those who currently qualify for the R350 grant, which was introduced last year to ameliorate the effects of Covid-19’s economic devastation.

Although it was meant to be temporary, it has been extended several times as a crucial cushion against poverty for millions.

There have been calls for the grant to be made permanent, with many arguing that it is the perfect launching pad for a basic income grant.

A Treasury source said the proposal was an attempt to contain costs by reducing the total number of grant recipients from the current 9 million. The disbursement of the Covid-19 social relief grant to an estimated 6.5 million recipients is expected to cost R28 billion by March next year.

A presidency official told City Press: 

We’re very worried about this proposal, as it’s tantamount to robbing the poor of their money.

“There’s disagreement between the presidency and Treasury,” said the source.

The proposal has been called “reckless” and “unconstitutional” by civil society.

Nqobile Zulu, research manager at the Studies in Poverty and Inequality Institute, told City Press that the organisation had been made aware of the proposal, but had assumed it would be rejected because of its exclusionary nature, its deeply patriarchal bias and its sheer impracticability for multiple reasons.

Zulu said the introduction of a family grant would mean the exclusion of millions of people, as “information” suggested that it would only be extended to 1 million households.

“The National Treasury seems determined to go ahead with this reckless and unconstitutional plan in the run-up to the MTBPS [mini budget speech],” said Zulu.

Government must reject this problematic proposal and ensure open, transparent engagement. This plan would be disastrous and must be decisively rejected

“The proposal would lessen the poverty-reducing impact of households pooling a number of individual grants (a common feature of the Covid-19 grant), as they’d now only receive one,” explained Zulu.

He added that the proposal that a grant only be targeted at household heads, rather than household members, was anti-poor, as it would radically reduce the number of beneficiaries at a time when hunger, poverty and unemployment were worsening.

Zulu warned that if the family grant were implemented, it would have a devastating effect on women and children, and would cause multiple administrative inefficiencies, while creating room for corruption.

Busi Sibeko, economist at the Institute for Economic Justice, said the introduction of the proposed family grant would deepen dependency of household members on the “head of the household” and worsen gender power imbalances, intra-household dynamics and gender-based violence.

“Even if the grant were awarded to a female head, it would deepen tension in the household as individual adults would no longer receive it,” said Sibeko.

She said the proposal directly accounted for household conditions or the number of dependants – and would be skewed against women-headed households that carried heavier burdens.

It’s impossible to determine the number of dependants for whom a household head is responsible, so the grant would be a horribly blunt instrument – unlike the grant to adult individuals,” she said, adding that the system would exclude a significant percentage of poor people.

She, like Zulu, believed it would also invite extensive corruption associated with the registration of households.

The move to introduce the family grant comes after civil society organisations, supported by some in the governing party, called on government to extend and improve the Covid-19 grant from April next year, as a basis for introducing a basic income guarantee for the 18 to 59 age group.

Godongwana has on multiple occasions spoken against the implementation of the basic income grant, stating his support for jobs rather than grants, and adding that South Africa was already in a debt crisis and could not afford to incur further debt.

City Press has previously reported that Business Unity SA (Busa) has also spoken against the implementation of a basic income grant, arguing that its introduction might compromise fiscal sustainability.

Busa CEO Cas Coovadia said the grant amount could come to between R68 billion and R300 billion, and was a decision that, once implemented, could not be reversed.

He said the basic income grant implementation would also compete for other revenue resources, and proposals to raise various taxes to pay for it would nullify the option of paying for other policy measures that were critically needed – such as wider access to quality healthcare or a broader social security safety net that was contributory from employment.

Source: City Press