Share

Diving into the South African grants system

Population and Employment statistics

StatsSA mid-year population estimates for July 2014 stood at 54 million.[1] Approximately 30% of the population is aged younger than 15 years (16.2 million) and approximately 8.4% (4.54 million) is 60 years or older. This puts the 15-59 age group at 61.6% (33.264 million).
The 2014 Quarter 1 (Jan to March) Labour Force Survey shows the Population aged 15–64 years as 35.177 million. The Labour force being 20.122 million, these are the people of a productive age who can be employed. The people actually employed was 15.055 million with the employment in the formal sector in the formal sector (non-agricultural) being 10.78 million[2]

Government Revenues Government gets money and spends money in the same way an individual does. Taxes such as income tax, corporate tax, value added tax (VAT), fuel levies, customs & excise duties form the revenue inflows for government. In the 2013/14 budget, tax revenue from personal income tax was budgeted to contribute 34% to the national coffers, VAT 27% and corporate income tax 19%. These three tax categories constitute 80% of the government revenue inflows.[3]

Grants According to the Social Development Minister Bathabile Dlamini just under 16 million South Africans were receiving some form of social security grant from government last year[4]. This cost government more than R109bn during 2013/14. The SA Social Security Agency provides grants including old age, war veterans, disability, grant-in-aid, care dependency, foster care, and child support.
Of the 15 932 473 grant beneficiaries last year, 70% (11 125 946) received child support grants. The total spent on these grants was R39.6bn. Over the same period, R44.1bn was spent on old age grants - referred to as older person's grants - to 2 969 933 beneficiaries. The total spent on all grants last year was R109 053 880 000 [R109 billion].
Figures for the first quarter of this year (2014/15) show the number of beneficiaries is on the rise. There were 16 242 196 grant recipients at the end of June, and the cost of providing their benefits up to that date was R29.3bn. In 1998 (16 years ago) there were 2.5m social grant beneficiaries and there were 7.9m in 2003/2004 (~10 years ago).

Concluding remarks 
The current scenario of about 11 million people contributing 34% directly to the national coffers through personal income tax and indirectly through other taxes such as VAT on goods and services- is not sustainable. 
Recent pronouncements by the Minister of Finance of potential tax changes coming up in 2015 is set to increase the tax burden. All this is happening within a context of increasing grant recipients. Looming introduction of other drains on the fiscus such as the National Health Insurance is set to result in further strain on the taxpayer.
Some might not take notice when there is frivolous expenditure by different government departments/ministries yet all this has a bearing on their pockets. We need to become a more active and engaged citizenry at all levels…local, provincial and national. Corruption, nepotism, kickbacks etc all have repercussions on the direction our country is headed.


Sources:

[1] http://beta2.statssa.gov.za/publications/P0302/P03022014.pdf [2] http://beta2.statssa.gov.za/?p=2652 [3] http://www.treasury.gov.za/documents/national%20budget/2013/guides/2013%20Budget%20Highlights.pdf [4] http://www.fin24.com/Economy/Social-grants-cost-SA-R109bn-says-Dlamini-20141020
We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Voting Booth
Do you think corruption-accused National Assembly Speaker Nosiviwe Mapisa-Nqakula will survive a motion of no confidence against her?
Please select an option Oops! Something went wrong, please try again later.
Results
No, her days are numbered
41% - 491 votes
Yes, the ANC caucus will protect her
59% - 697 votes
Vote
Rand - Dollar
18.92
+0.1%
Rand - Pound
23.88
+0.1%
Rand - Euro
20.38
+0.2%
Rand - Aus dollar
12.32
+0.2%
Rand - Yen
0.13
+0.1%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE