R13.2bn social spending boost

11 February 2009

South Africa, proportionally one of the world’s biggest spenders on social grants, will spend an extra R13.2-billion on social security in 2009/10 to help protect poor South Africans during the global economic slowdown.

Delivering his Budget speech in Parliament in Cape Town on Wednesday, Finance Minister Trevor Manuel said that strengthening the social security net – which supports in the region of 13-million South Africans – was “critical during this period, when more poor families are vulnerable”.

As of April 2009, the maximum values of the old age, disability and care dependency grants will rise by R50 to R1 010 a month, while the foster care grant and child support grant will also increase, by R30 to R680 and R10 to R240 a month, respectively.

Spreading the net wider

In addition, the extension of the state child support grant to children up to the age of 15 will also take effect this year, while the reduction in the qualifying age for old age grants for men, from 65 down to 60, is in progress.

Manuel said that evidence pointed to the fact that the child support grant, which is available to parents who earn less than R2 300 a month, has contributed significantly to a reduction in child poverty in South Africa.

The government was therefore considering increasing the eligible age for the child support grant to 18 years of age, subject to affordability.

Twelve percent of public spending

South Africa’s spending on social grants is set to increase to R80-billion for 2009/10, and will amount to about 12 percent of total government spending, making South Africa proportionally one of the world’s biggest spenders on social grants.

According to the National Treasury, consolidated expenditure on social protection has increased from R72.3-billion (or 4.6 percent of GDP) in 2005/06 to a projected R118.1 billion (or 4.8 percent of GDP) in 2009/10.

“The largest adjustments to spending plans go to poverty reduction: R25-billion is added to the budgets of provinces, mainly for education and health care, and R13-billion for social assistance grants and their administration,” Manuel said.

“R4-billion is added to the school nutrition programme and R2.5-billion goes to municipalities for basic services.”

Public works programmes

Creating lasting employment was another critical factor as the country headed for economic turbulence, Manuel said.

The minister challenged participating departments, provinces and municipalities to exceed their targets for creating Expanded Public Works Programme (EPWP) jobs in the year ahead, as the contingency reserve for 2009 had been increased to allow for additional funding of employment projects in the 2009 Adjustments Appropriation.

In 2008, the EPWP provided over one-million temporary jobs, and the 2009/10 Budget tables an amount of R4.1-billion for the roll-out of the second phase of the programme.

The aim is to increase the number of full-year equivalent job opportunities to over 400 000 over the next five years, as well increase the duration of temporary jobs.

Proposals for this include longer-term public sector employment – such as home-based care and community health services – which is directly funded by departments and supported by targeted training and skills development.

Source: BuaNews