SOUTH Africa must find alternatives to its social grant system‚ says the South African Institute of Race Relations (SAIRR).
The call comes at a time when the Department of Social Development is celebrating the issuing of millions of South African Social Security Agency (Sassa) social-grant debit cards‚ which it says will help to curb social fraud.
About 5-million South Africans pay income tax‚ and the SAIRR estimates that 10% of these taxpayers account for more than 50% of total tax revenue.
The institute’s deputy CEO‚ Frans Cronje‚ said on Tuesday that the risk now was that the country’s budget deficit precluded real increases in the value of grants.
"In other words‚ the living standards of poor people must be expected to slip in years ahead‚” he said.
"South Africa is already the largest welfare state in the developing world. Consider that there are more people in South Africa on welfare than people who work. In 1994‚ there were three times as many people working as there were on welfare.”
In the SAIRR’s South Africa survey for 2012‚ it notes that in 2001‚ 8% of the population benefited from social grants. In 2012-13‚ that figure stood at 31%.
"The alternative to a welfare system is job creation‚” Mr Cronje said. "In fact‚ that’s the model used to improve living standards in most emerging markets. South Africa’s redistributive welfare model is unique.
"However‚ you can’t expect much job growth in an economy that grows at 2%‚ and with our labour volatility.”
Meanwhile‚ at a briefing in Pretoria on Tuesday‚ Sassa CEO Virginia Petersen and MasterCard’s president of international markets‚ Ann Cairns‚ said 10-million debit cards had been issued after the introduction in March 2012 of the new biometric grant disbursement system.
Since the launch‚ nearly 22-million social grant beneficiaries have reregistered on the new system‚ which was introduced to curb fraudulent grant applications and collections. The system also cuts grant administration costs by distributing payments electronically.
"A key driver of the new system was to put stringent measures in place for Sassa to ensure that only qualifying grant recipients — those really in need — are authorised to receive one of the seven grants that Sassa offers‚” said Ms Petersen.
"Between April 2012 and June 2013‚ more than 150‚000 grants were cancelled‚ which has led to a saving of R150m a year.”
Earlier in 2013‚ Social Development Minister Bathabile Dlamini said the reregistration process had uncovered fraud involving nearly R60m‚ but only R1.1m had been recovered.
Many staff members within Sassa faced disciplinary action over grant fraud‚ and more than 50 of the agency’s employees have now been suspended or dismissed.
Ms Cairns said by supporting the government in the implementation of the electronic payments programme‚ MasterCard was helping to save money and prevent fraud.
"Millions of South Africans lack access to the most basic financial tools‚” she said. "They don’t have secure places to save money or reliable means to transfer it and use it for transacting. Nearly one-fifth of the population now benefits from having a formal banking product‚ helping them build a stronger future for themselves‚ their families and their communities.” © BDlive 2013