Tito: Consolidate social grants

Cape Town - South Africa should be thinking about "consolidating" its social grant system, rather than expanding the number of recipients, outgoing Reserve Bank governor Tito Mboweni suggested on Thursday.

Delivering the tenth Steve Biko memorial lecture at the University of Cape Town, he said from a politician's point of view it was good to point out the number of people benefiting from social grants had grown.

"But from the point of view of the total development of the person, the dignity and consciousness that we talk about of a person, is this the direction that we should be going?" he asked.

He said the number of social grant beneficiaries had expanded six fold from 2.4 million in 1996 to 12.3 million in 2007.

"But the question can be asked: should we not be thinking about consolidating the social grant system instead of over-expanding it [in terms of] number of recipients?"

He said that though they might be isolated cases, and despite claims it was an urban myth, there were people in the townships who said they were better off having a baby because they then got a child support grant.

"The underprivileged must get support from all of us, but we must just be careful about the trend and tendency."

Mboweni also said he did not think the current wave of strike activity was what some commentators had called a "winter of discontent". Strike activity was a seasonal phenomenon, he said.

He warned that whatever the level of settlements reached in wage negotiations, they should always be compensated by productivity gains, lest inflation be pushed higher.

"No central bank worth its salt can ever tolerate high inflation," he said.

"This should be the case in particular when some in our society think that the louder they shout, the more the truth about what they shout about."

- Sapa