Treasury studying plans to tackle country’s poverty gap

The National Treasury has commissioned a study to determine what long-term plan can be devised to narrow the country’s current poverty gap.

Addressing Parliament’s Select Committee on Appropriations (SCOA), Treasury said it was considering five options.

These included evaluating the current R350 grant; the Basic Income Grant; the Brazilian model that offers grants to poor households rather than individuals; an evaluation of the Presidential Employment Initiative and consideration of a job seekers’ grant.

Treasury, the Financial and Fiscal Commission (FFC) and the Parliamentary Budget Office (PBO) presented their perspectives on the Second Special Appropriation Bill to the SCOA on Wednesday.

In a statement, Committee chairperson Dikeledi Mahlangu cautioned that the country should not be turned into a welfare state.

She said there was a need for a sustainable strategic plan going forward and called for the avoidance of a recurrence of the bungle during the previous disbursement of the R350 grant.

She also called for a proper plan to be put in place to avert any possible fraud.

The Committee said in a statement that Treasury had assured the committee that “elaborate cross-reference checks” were in place, involving multiple government departments and agencies, which counter the previous inefficiencies and make it difficult for fraud to occur.

Mahlangu in the meeting also called on the National Treasury to support small business owners through the application procedures.

She reiterated that the committee always derives valuable inputs and technical expertise from its interactions with these entities.

“We value these interactions because it will go a long way in advancing the call for economic transformation and inclusive growth and to ensure that public finances are appropriated for their intended objectives and are managed more efficiently,” she said.

To address the impact of the civil unrest in Gauteng and KwaZulu-Natal in July and the third wave of the COVID-19 pandemic, a proposed R32.85 billion was set to provide funding allocations to the South African Special Risks Insurance Association (Sasria), the Department of Social Development, the Department of Police, the Department of Defence, and the Department of Trade, Industry and Competition.

In its presentation, the National Treasury explained to the committee why Sasria’s R3.9 billion injection request should be considered urgent.

Dr Mark Blecher from Treasury said the allocation to Sasria was meant to honour its insurance claims, estimated at well over R25 billion, emanating from losses incurred by its clients (shops, malls and factories) during the civil unrest in July.

Part of this Bill was an urgent request for R26.7 billion for the Department of Social Development, aimed at extending the R350 Social Relief of Distress (SRD) Grant to March 2022 for the benefit of 9.4 million eligible beneficiaries.

The FFC welcomed the R26.7 billion allocated to the Department of Social Development to extend the R350 SRD grant to March 2022.