Johannesburg - Minister Tito Mboweni says that the reintroduction of the R350 social relief of distress (SRD) grants was a decision of the National Treasury and President Cyril Ramaphosa alone – the governing party had nothing to do with it.
Mboweni was reacting to claims that the return of the grant was a mere measure to boost the ANC’s electoral chances ahead of the upcoming local government elections.
He made the denials while responding to questions by the media during a virtual briefing where he gave finer details of his R38.9 billion financial package to assist unemployed people and businesses hard-hit by the violent protests in Gauteng and KwaZulu-Natal.
The government has set aside R27bn for the payment of R350 social relief of distress grants to eligible and unemployed people, but Mboweni insists that the ANC had nothing to do with it.
In his reply, Mboweni said: “We operate within a society which experiences a lot of distress. Any caring government will come to the support of its citizens. There was no pressure from the governing party. There was no pressure from Luthuli House. Did I get a call from Jessie Duarte, the deputy secretary general of the governing party? No, she hasn’t (called).
“This was a conversation between the Ministry of Finance and the Presidency. We debated this issue at length and President Cyril Ramaphosa through his negotiation skills while a trade union leader convinced us to release the R27bn,” Mboweni said.
He said the SRD grant would include support to child care-givers on an application basis, saying they wanted to make it clear that this was not a permanent social protection solution.
“Much work is still being done in this area, and additional borrowings to fund a consumption grant are not supported,” Mboweni said.
The minister and his officials, however, warned that this was not an extension of the grant which was terminated in May this year, but a reintroduction of it.
Finance Ministry director-general Dondo Mogajane allayed fears that the country was likely to borrow money from other financial institutions and rejected the view. According to government officials, cash will come from the Finance Ministry following its ability to meet its revenue targets.
The media were also told by the head of the South African Revenue Services, Edward Kieswetter, that there was an increase in tax compliance by major companies, especially the mining sector, which allowed the government to assist the unemployed.
Mboweni also announced relief measures to assist businesses destroyed and looted during the violence and looting, saying they have urged the South African Special Risks Insurance Association (Sasria) to immediately pay out insurance claims.
“Infrastructure damage is widespread, mainly in KwaZulu-Natal and Gauteng, where numerous buildings were set alight or property purposefully damaged. “The current estimated cost of damage to property and equipment in eThekwini alone is R15bn. There is widespread damage to shops and malls, network towers, post offices, factories, roads and freight trains,” Mboweni said.
He said hundreds of ATMs had been destroyed, making access to cash harder.
Mboweni warned that while the vast majority of the damage may be covered through insurance, the real knock to the economy was the damage to business and investor confidence in the country.
He said the government had decided to provide full financial backing to Sasria should it exceed its solvency limits.
“The National Treasury is putting in place the necessary arrangements to ensure that this commitment is met should it be needed. Qualifying uninsured businesses will be supported by the state, partly through a reprioritisation of the existing support mechanisms for small businesses.”
He said the government was also engaging with relevant stakeholders (Nedlac, banks, insurance companies, community organisations) to deal with the challenges facing uninsured businesses.
“It is expected that the package will amount to R38.9bn of on-budget items, including revenue measures of R5bn and spending measures of R33.9bn. As required by section 32 of the PFMA (Public Finance Management Act), the National Treasury will publish the quarterly revenue and spending,” Mboweni said.
Political Bureau