Fin24

Social grants weighing on govt coffers

2012-06-27 15:33

Johannesburg – The latest Statistics SA (Stats SA) figures released on Wednesday suggest social grants and a large public service are taking their toll on government coffers.

Stats SA’s Financial Statistics of National Government report showed the government’s cash payments for operating activities rose by R60.5bn to R791.9bn in 2010-11‚ from R731.3bn in 2009-10‚ mainly due to an increase in grant payments and employee compensation.

The seven main economically classified cash payments for operating activity categories are: compensation of employees; purchases of goods and services; interest; subsidies; grants; social benefits; and other payments.

The largest contributor to the rise in total cash payments for operating activities was grants‚ at R468.9bn; followed by social benefits‚ at R91.4bn; and compensation of employees‚ at R87bn.

SA’s tax base continued to come to the rescue in the 2010-11 financial year‚ figures suggested.

An increase mainly in collected taxes led to a R76.8bn rise in government’s cash receipts from operating activities to R688.3bn.

Comments
  • IcemanGP - 2012-06-27 15:56

    and the small tax base continues to support the cANCer.

      Koos - 2012-06-27 23:30

      China. I've being saying this for the past 3 years but nobody listens. The same goes for the hugh wastage on ARV's. Mbeki were the clever one. He knew it can not be sustained.

  • mthulisi.msimanga - 2012-06-27 16:00

    Very disturbing and we continue to milk the cow that we are not feeding.

      mark.haupt.31 - 2012-06-27 16:34

      or eating the golden goose, and all the eggs before any can hatch. Very short-sighted but pretty much expected.

      steve.ritchie.739 - 2012-06-27 16:35

      Well said Bro. At least someone out there recognizes the problem.

  • kosmonooit - 2012-06-27 16:03

    'and a large public service' should read 'and a dysfunctional, ineffective, corrupt and bloated large public service'

  • franco.beukman - 2012-06-27 16:06

    Well ANC if u take away those grant to perfectly healthy nd give it to the ppl that realy need it u will c that those figures will drop nd the burden won't b so heave .stop buying votes and earn it

  • Janette - 2012-06-27 16:08

    It was the worst thing to introduce, especially when the child does not benefit always.

  • Derek - 2012-06-27 16:08

    (in-ep-toc'-ra-cy) - a system of government where the least capable to lead are elected by the least capable of producing, and where the members of society least likely to sustain themselves or succeed, are rewarded with goods and services paid for by the confiscated wealth of a diminishing number of producers.”

  • charlesdumbwin.dumbwin - 2012-06-27 16:13

    BAWAHAHAHA, this is what happens with a banana republic government who are not a real goverment but rather still a liberation struggle movement. Giving grants to the poor to secure their votes isn't helping them to create a better life for themselves.

  • reyn.varkevisser - 2012-06-27 16:16

    The anc must now stop showing how not to rule. We get the point

  • africanwolf - 2012-06-27 16:20

    Stop social grants create workplaces instead

      jan.kotze.7 - 2012-06-27 17:08

      africanwolf I like your thinking. Let Goverment use the land that belong to them and set up workplaces where these recipients of social grants can contribute positively to society and earn their grants. Very much like the Kibbuts in Israel

  • brian.semake - 2012-06-27 16:24

    There are genuine cases for social grants but giving someone with a sound mind assistance based on individual wrong choices is absurd, why pay for a young girl social grant for not using a condom during intercourse baffles me, and drink it.\r\nAnd we will continue doing so as taxpayers now the government wants to introduce youth subsidy which is a good idea but if they give the unemployed youth directly they will drink it or use it on drugs\r\nWe will never find peace as taxpayers

      steve.ritchie.739 - 2012-06-27 16:43

      Wonder how many ghost recipients of these grants there are and how it equates in rand terms. The rot has truely set in.

  • mark.haupt.31 - 2012-06-27 16:31

    Of course none of this is sustainable but it's keeping the cANCer in power and the people from open revolt, a sort of win-win scenario for those who've looted enough and can now retire. For the people of course it's a lose-lose situation but who cares.....

  • mark.haupt.31 - 2012-06-27 16:40

    For the benefit of the ANC supporters out there who have difficulty with large numbers, this means the government are busted and will soon be cancelling your grants, or possibly giving you mielie meal instead. Definitely no mercs, or houses, or jobs this year folks, sorry.

      Alice - 2012-06-27 16:53

      I will be very happy if they do cut off all those grants including building RDP houses. I only back up senior citizens because they deserve to get monlthy grant.

      sibusiso.mkoko - 2012-06-27 17:18

      They probably, and most likely will never see your post, as they hardly have access to the web. So vent out your anger in a more mature way, you twit. Go tell eye them eye-to-eye, and see what they'll do to you.

      Tommo - 2012-06-28 00:20

      @sibusiso. They will kill him is probably what they will do. Which doesnt say too much about their maturity either. I thought marks statement was quite insightful.

  • justin.pretorius - 2012-06-27 16:46

    So we pay for people to have more babies just to get votes?? How is this sustainable? Of course it isn't sustainable this is what communism is

  • vivian.harris.73 - 2012-06-27 17:31

    U mean they can't steal as much as they want to now...shame.

  • Essy1945 - 2012-06-27 17:56

    ... and we the tax paying FEW are the fools. I have a small shop in Plettenberg Bay, I employ 5 people, 2 men and 3 women. All of them work permanently and get salaries, 4 of them get grants for their children - yes they told me. 1. One's mother gets a grant for his son, so does he. 2. The other male's girlfriend and wife of his 4 kids (1 in Kwano, 3 in Queenstown get too). 3. The one lady gets a pension for her mother - who is dead. 4. And the last lady's mother get grants for her 2 kids, AS DOES SHE! When I asked her how she & her mother both got grants as she works (as does the father of these 2 kids), she said she moved out of her mothers house when they came to look and verify so that her mother got the grants, once approved she moved back. She also told them she didn't work and applied for grants, she got it, NOW however she gets a good salary for Plett, BUT still gets grants for her 2 kids. This same lady was given a RDP house in Coldstream/Tsitsikama, but rents it out - here too she gets an additional income, yet stays with her mom who was given a RDP house in Plett! It's no wonder more and more 'tax paying' citizens are declaring themselves unable to pay - why should they when this blatant robbery of vital money for the development of the country as a whole is stolen by their very next persons neighbour. If not them, then corrupt officials will steal it so why pay taxes at all! Government, by trying to win over votes but digging a hole for itself.

      Sterling - 2012-06-28 01:08

      When Moesetsi Mbeki pointed out the danger of all of these people on family grants, he was called a coconut and laugh at. Now, SA is going to go broke with half of the population on family grants. This country has exported million of jobs to China and put the people on family grants.

      Rational100 - 2012-06-28 05:37

      Look on the bright side if u don't want to die of a heart attack; 1. No government in the whole world is efficient in allocating funds and resources in general. 2. When US do quantitaitive easing (printing more), they pump it into banks who in turn get bonuses and on-lend whatever they cannot dish out amongst themselves. This is why they have a $16 trillion debt as we speak. 3. Through lack of creativity, our govt pumps money into social grants in return for votes. This money ends up in your hands as disposable income (remember these people dont take a holiday to Mauritius!) which drives demand for goods and services thus benefiting business. 4. This money also keeps the masses loyal to the ruling party until Julius pumps them up with the idea of land grabs. 5. It's too late to cut back now and u must just find a business corner and save for the coming Armagedon... 6. When the money starts flowing out thru arms deals, e-tolls, IMF funding etc the system will begin to crumble and a second revolution wil start.

      Wendy - 2012-06-28 09:22

      So, Essy, why have you not reported them? If you are aware of what is happening and do nothing about it, you are an accessory to a crime!

  • lotus.river.5 - 2012-06-27 17:57

    Not surprised at all!I see about 10 ppl a day with forms from sassa applying for grants for various things.people want to strangle you if you tell them just because they are hiv positive,have high blood pressure or diabetes does not mean they are disabled.there's so much unemployment!I even had a lady from mozambique applying for a disability grant.some people don't take their treatment just to be sick enough to qualify for a grant.makes me want to cry:(

      Ken - 2012-06-27 18:16

      I would like to know why Americans cannot receive a social grant from ZA. Can anyone submit an application. Please advise.

  • Ken - 2012-06-27 17:57

    Step 1. The number of grant seekers will increase as the majority increases. Step 2. Only way to pay is to increase taxes. Step 3. Increase in Taxes means more unemployment, more businesses closing. Step 4. less tax. Step 5. Go back to step 2.

      Ken - 2012-06-27 17:59

      What happened to Go back to step 1.?

      Ken - 2012-06-27 18:00

      Ken Step 1. takes care of its self and requires no Government intervention.

      Ken - 2012-06-27 18:01

      Ken what happens when people cannot pay any more taxes as in step two

      Ken - 2012-06-27 18:02

      Ken stop being stupid, they become grant seekers.

      Willie - 2012-10-25 14:52

      STEP 1: reduce the number of people on this program STEP 2: reduce the number of unemployed,HOW ? tell cosatu to go and jump in a lake

  • faizieishlah.shabalala - 2012-06-27 18:02

    Duh, and as we didnt know it would

      Ken - 2012-06-27 18:13

      Help me out here, what did you know was going to happen? Are you suggesting that it might be a bit expensive? Do you think it's a bad idea in the long run? Help me I'm not in Government but would like your view.

  • Zahir - 2012-06-27 18:55

    The anc prefers to pay grants than too provide quality education and skills development the money will run out in 5 years

  • Mike Brett - 2012-06-27 19:10

    I hope a member of the press contacts me to substantiate the facts set out below. I am on the Board of Epilepsy SA, Mpumalanga-Limpopo, which operates two centres for the worst sufferer's with Epilepsy. The one centre is in Dullstroom (Mpumalanga Province) and the second is in Elandsdoorn (Limpopo Province). These centres rely on government subsidies. Since 2005/6 the level of grants received has declined from 85% of costs to 13% for the Dullstroom Centre in 2011/12 and 23.8% for the Elandsdoorn Centre in 2011/12. In the financial year 2011/12 Dullstroom Centre received R 38.03 per resident per day from which staff salaries, water, electricity, transport, medication, etc. must be paid. Elandsdoorn received R140.00 per resident per day. Increases granted (if granted) fall well below the CPI., e.g. 0.17% versus 5.50% (CPI). This raises question; are our disabled people not from the same country and should be treated equally? Each year in February a Service Agreement is signed which states that the financial year commences on 1 April and that subsidies will be paid quarterly in advance. This translates to subsidies having to be paid by 1 April, 1 July, 1 October and 1 January. The track record of payment in the first month of the quarter for the Dullstroom Centre has been: 2008/9 - 50%; 2009/10 - 25%; 2010/11 - 25%; 2011/12 - 0%. The Service Agreement for 2012/13, commencing on 1 April 2012, was only made available for signature on 5 June 2012, four months late. At the time of writing both centres still have not received the subsidy due on 1 April 2012 resulting in having to borrow money to pay salaries and dramatically reduce the quality of food served. If it were not for the big hearted members of the local and surrounding communities the residents will starve. We now face the risk of closing the Dullstroom Centre putting poor and vulnerable people out on the streets. THIS REALY QUESTIONS THE ANC'S REPEATED STATEMENTS THAT THEY ARE THERE TO SERVE THE POOR??????

  • thami.rapoo - 2012-06-28 04:36

    For how long will SA be a wellfare state. This will have to stop bcouse few people are employed. This will lead to more taxes.

      Rational100 - 2012-06-28 06:41

      @ A welfare is a state were people are well-fed. As long as people with voting power go hungry they will always be well-fed...

  • johannes.lombard - 2012-06-28 07:48

    A bloated and corrupt public service (specializing in arms deals) brought Greece to its knees. Greece = South Africa?

  • tatsee - 2012-06-28 14:14

    The level of poverty in relation to the country’s wealth out there is alarming. I do quite a bit of performance evaluations on a number of major RSA Gvt poverty alleviation programmes that are based on creating job opportunities to the poor communities and I get to interview and evaluate some beneficiaries as to the impact of these progs and to be honest these grants are, at most times, the only reliable source of income for these communities-you have young girls, women and middle aged women who are having children just for the sake of having access to the Child Grants- sad part is the Gvt does not seem to prioritise Education as a means of exiting this poverty cycle-its all more grants year on year.

      denny.cray - 2012-10-25 15:20

      I don't think anyone wants to see people starving on the streets. The problem with these enormous government programmes is that (like you have said) they do nothing to treat the underlying problem - in reality they only make it worse. Taxpayers are assaulted from all sides via direct taxes (and inflation tax). When all is said and done even middle class taxpayers can see half of their income being transferred to a government which often treats them with contempt and seems to do very little to improve the lot of those they are claiming to help. Is it any wonder that people feel so discouraged?

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