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.
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