'No reason to be apologetic': Mboweni on tiny social grant increases
Finance minister Tito Mboweni says the government has “no reason to be apologetic” for raising social grants by less than the prevailing inflation rate.
Mboweni was responding to questions at a virtual post-budget press conference where he was asked if the government was not concerned about a political backlash after he tabled modest increases to social grants.
The inflation rate is 3.3%, the lowest it has been since 2004.
In his budget on Wednesday, Mboweni announced modest increases to social grants, with the child support grant increased by R15 from R445 to R460 per month.
Other social grants such old age and disability grants increased by only R30, from R1,860 to R1,890 a month.
Trade union federation Cosatu lambasted the increases as meagre, pointing out that this would diminish the buying power of grant recipients.
“The lower-than-inflation increases to social grants will be distressing for these destitute recipients,” Cosatu's parliamentary co-ordinator Matthews Parks said.
But Mboweni said the government was not apologetic about the move, arguing there was no social contract in place compelling it to increase social grants with every budget.
“The political answer to that is that there's no need to be apologetic about it. There's no social contract that says every year there must be x amount of increase, so there's no need to be apologetic at all,” said Mboweni.
“Allocations that were made is what we could afford. Overall if you look at social services, they occupy about 56% of the allocations, that's quite substantial in a country like ours given the nature of the budget. So, no, there's nothing to be apologetic about.”
Mampho Modise, deputy director-general of public finances in the National Treasury, said the government had no choice but to settle for modest social grant increases due to spending pressure and rising debt levels.
“If you look at the budget reductions since 2012, we did the best we could to protect social grants. But now the amount of consolidation that was required was much more than what we could do to protect social grants.
“Yes we agree it's below inflation but remember these are the years where we really have to consolidate. To review the social grants we'll have to do it at a point where the fiscal or the debt trajectory is more stable.
“At least there's still increases ... there's some increases of social grants, rather than not increasing the nominal value at all, but we are faced with the challenge of fiscal consolidation.”
Would you like to comment on this article or view other readers' comments? Register (it’s quick and free) or sign in now.
Please read our Comment Policy before commenting.