Flawed public purse
South Africa's hefty social grants bill is likely to bulge further in the future, unless the millions of unemployed youths sitting idle are absorbed into the economy. And the reality is that the government and taxpayers simply have no choice but to dig deeper into their pockets.
The revised national development plan paints a worrisome picture of an economy buckling under the immense pressure of a heavily dependent aged population, an ageing workforce earning too little to save for retirement and the millions of orphaned children.
"Ultimately the state must generate sufficient income from the active groups in the population to be able to redistribute to those who are less active or inactive while still meeting other policy priorities," the document says.
"It will be undesirable if the guarantees or transfer benefits are too many or generous and hence contribute to an unsustainable fiscal position. It is equally undesirable and difficult to reduce the benefits and guarantees once they have been introduced."
The government has budgeted R105-billion for social grants for the current financial year.
This figure is projected to grow to R122-billion in the 2014/2015 financial year.
Almost 16 million South Africans receive grants.
The plan issued a stark warning arising from uncontrollable youth unemployment.
According to the plan, seven million (57%) of the estimated 13million people employed today will leave the labour market in the next 18 years and that half of them (3.5million) will be over the age of 63 years.
Owing to this startling revelation, more young people need to be roped in to the labour market "for longer".
"Failure to create jobs will mean public expenditure will need to rise dramatically because ... there will be a growing number of elderly people who would not have worked when they were of working age," says the plan.
They seems to be in favour of the R5-billion youth wage subsidy, which has been stalled by labour federation Cosatu at Nedlac, while delegates at the recent ANC national policy conference rejected it in favour of a Job Seekers' Grant.
The commission's report stated: "For many, especially the youth, gaining entry into the labour market is not a smooth process. Hence efforts should be made to facilitate labour market entry through active labour market policies."