This article was first published by Rational Standard on 28 May 2025
There is nothing as permanent as a temporary government programme. The difficulty in eliminating the costly Social Relief of Distress (SRD) grant, which was meant to only be a temporary grant during COVID-19’s lockdown, proves this adage.
It is all well and good to suggest costly fixes for temporary problems, but history has proven that there is nothing temporary in government policy. Political lack-of-will and legal red-tape will keep even the costliest policies on the books.
In the case of the SRD grant, the over R60 billion a year that it costs the fiscus almost resulted in the upping of VAT, which would have devastated our economy. And let us not forget that the SRD grant is already on top of other grants and forms of welfare.
In 2023/2024, R263 billion was spent on social welfare, 96.4% of which was spent on social grants, and approximately R7.8 billion of which was spent on administrative costs alone. According to the government over 26 million South Africans receive social welfare. Other sources put the number at29 million, all while only 7.4 million taxpayers are left to foot the bill while the government makes it increasingly harder to make a living, through increased regulations and a downright refusal to tackle crime.
Putting the effectiveness of welfare in helping people aside, the cost of our welfare system and the tagged-on SRD grant in particular, is grossly unsustainable. We can’t keep relying on redistributing wealth while the pie is shrinking.
Unfortunately, the African National Congress (ANC) sees no problem with such a huge proportion of South Africans relying on government handouts. They seem to think that taxpayers have infinite wealth that just needs to be looted from them more and more forcefully.
The success of a welfare system should be measured by how many people no longer need it – Not how many people it traps into dependency. The SRD grant has proven to be a failure, and a costly one at that.
The fact that the SRD grant was meant to only last for a short period of time yet is now expected to keep growing should be an indication that the system didn’t work. We’re out of lockdown. COVID is no longer a concern. Yet, SRD grant recipients are growing.
This is a symbol of the ANC’s failure to create a society that enables wealth creation, jobs and prosperity.
Rather than increasing government spending on more and more welfare, the government needs to focus on cutting red-tape and deregulating the economy to enable the private sector to create jobs, grow wealth and produce value. This will mean sustainable income, more tax-money for the fiscus, and a more prosperous South Africa.
As it stands, there are too few jobs due to a strangled private sector, and a drastic skills shortage due to the gutting of our technical training colleges. The solution is to cut labour laws and weaken the powers of coercive trade unions, while enabling private training colleges through streamlining accreditation, and allowing businesses to facilitate partnerships with these colleges to enable apprenticeships – a system which thrived before the system was destroyed through government meddling and centralisation.
What needs to be made clear is that we cannot continue on this path. A huge proportion of our society relying on handouts is not good for the fiscus, and it is not good for them. What we need is life-affirming employment, and sustainable wealth creation. And this can only be achieved by not increasing welfare spending, but by cutting red tape and enabling a thriving free market to create jobs.
