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Government considering new ‘job seeking’ grant for South Africa

Government considering new ‘job seeking’ grant for South Africa

SOURCE: BUSINESS TECH

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President Cyril Ramaphosa says that National Treasury is currently modelling a new grant to assist job seekers in the country.

However, he said that the implementation of such a grant would depend on the availability of funds and alluded that it could not co-exist with the R350 social relief distress (SRD) grant, which has been extended to March 2024.

Responding in a written parliamentary Q&A this week, Ramaphosa said that the government has considered various options to support the unemployed in addition to the many measures that are currently in place.

“A basic package of support in the form of a work-seekers grant that would assist the person in looking for work and travel to interviews actively is being modelled by the National Treasury,” he said.

“The implementation of such an allowance or grant will depend on the availability of funding, taking into account the government’s commitment to the R350 SRD grant that is currently being paid.”

The president said that several measures are already in place to assist job seekers.

Through the Department of Employment and Labour and the National Pathway Management Network established under the Presidential Youth Employment Intervention, free assistance to work seekers has been provided, including the compilation of CVs, job preparation, life skills, employment counselling and access to job opportunities that employers have made available.

The World Bank suggested in October 2021 that the South African government explore a job-seekers grant to assist the millions of unemployed find work.

A job-seekers grant, set at R350 a month, could cost R16.2 billion rand a year, the bank said. However, some opposition parties have said that the costs associated with finding work are far higher, amounting to more than R1,200.

South Africa has over 18 million grant beneficiaries, with the government under pressure to adopt the R350 SRD grant as a permanent basic income grant.

Finance Minister Enoch Godongwana announced the extension of the SRD grant to March 2024 during his presentation of the Medium Term Budget Policy Statement in October.

As a result of the extension of the SRD grants, other social grants – such as old age grants and disability grants – will increase lower than inflation, the minister said.

According to Treasury, the SRD grant is expected to grow by at least 8.8% every year, and its financial implications could reach some R64.9 billion in the 2030/31 financial year – casting an impact on the sustainability of the public purse.

In light of this estimation, Godongwana said an indefinite continuation of the grant would have a serious impact on the stability of the public purse.

“Despite the provision made in this budget, I want to reiterate that any permanent extension or replacement will require permanent increases in revenue, reductions in spending elsewhere, or a combination of the two,” he said.

While the government is quite blunt about the financial impact of extending existing or introducing new grants, it has become politically expedient to use grants to score quick wins.

Following a national executive committee meeting in November, the governing African National Congress (ANC) doubled down on its position of extending social security in South Africa.

Moving forward, without giving any specific plans, Ramaphosa – speaking as president of the ANC – said that the party would double its efforts to address the growing cost of living crisis in the country by extending social grants where possible.

Ahead of its policy conference earlier in the year, the party suggested a wealth tax on the top 5% of earners in the country should be used to finance it.

Intellidex analyst Peter Attard Montalto noted in a column this week that turning to grants and moving to implement a basic income grant is an “easy way out” for a government that is struggling with finances and a dysfunctional state.

THE END.

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ALSO CHECK: Proposed changes to marriage and divorce laws in South Africa

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admin

African Union Commission Scholar || Founder @ Youth Opportunities Hub || Former RBA COST/Sahel Team at UNDP || TEF Alumni ||

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