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More people on welfare than have jobs in SA

Suggestions for reform include eliminating provinces and corporate tax.

There are now more people receiving social grants in SA than there are people with jobs.

Finance Minister Malusi Gigaba’s budget highlighted the predicament government finds itself in: there are 17.6 million people receiving grants, against the 16.2 million people with jobs in the country.

In 2001 there were 12.5 million people employed and just 4 million people receiving social grants, according to an Institute of Race Relations survey. The number of people on social grants has exploded more than four-fold in 17 years, while the number of official jobs has gone up just 30% over the same period. Aggravating the situation is the growth in public sector jobs from 2.1 million to 2.7 million since 2008. Public servants’ salaries – which are more than a third higher than the private sector average – now account for nearly half the annual budget.

“This situation is not sustainable,” Dawie Roodt, chief economist at the Efficient Group, told the Austrian Business Chamber at a post-budget briefing in Sandton last week. “I disagree that this is a conservative or reasonable budget, as some have claimed. It is an awful budget. SA has become a country of social upliftment, rather than a country of economic upliftment. We’re among the most highly taxed countries in the world, and there is no apparent recognition of how we got here or how we are going to get out of this mess.”

Rather than trying to focus on job creation, Roodt says the government should be looking at economic growth as the primary engine of job creation, flanked by privatisation, massive infrastructure development and a world class skills development programme.

Mike Schüssler of Economists.co.za says a worrying aspect of the structural dependence being created in the country is that of the roughly 16 million people with jobs, 10 million are in the formal sector and only 7.5 million of those pay tax. “If you add people who are pensioners, we are on our way to having 19 million people who are dependent on some form of social grant or pension. This leaves the few who are working to carry the burden. This cannot continue.”

The returns that South Africans receive on their taxes are abysmal. SA learners score among the worst in the world when it comes to maths and science, due in part to the high learners-to-educators ratio: 32 in SA versus 24 for the rest of the world. This is despite spending 22.5% of the budget on education each year. Social assistance will account for R197 billion or nearly 13% of the budget in the coming fiscal year. Coming in just behind this is interest spending, which will swallow R180 billion or 12% of the budget.

Narius Moloto, leader of the Pan African Congress and secretary-general of trade union federation Nactu (National Council of Trade Unions), says while the tax base is becoming smaller, government welfare grants are ballooning out of control – a situation that is unsustainable, even in the short term: “The cash grants system is another form of political patronage and does not encourage upward progression in the economy. The way it is structured at present entrenches dependency. With some of this money that is being spent on social grants, we could have established cooperatives and micro-enterprises in poor communities with a view to permanently weaning them off welfare. That’s not happening and the programmes aimed at job creation are not working.”

One quick way to cut spending is to eliminate the provinces, which are little more than super-Bantustans with mini-presidents, says Moloto. “SA is over-administered. There’s huge duplication between national, provincial and local government. We can save billions a year by eliminating this duplication.

“We’ve consistently argued for the building of an African economy based on self-reliance rather than dependency. Creating millions of jobs is the only way out of the mess this government has created, but it continues to rely on failed ideologies imported from elsewhere. If we are going to learn from abroad, let’s start by looking at countries that have full employment and encourage micro-enterprises as the first step on the economic ladder.  Let’s also start by surveying the exact nature of the economies in the townships, and see how we can build on our own knowledge base.”

The ultimate goal of any welfare programme is to render itself redundant, adds Moloto. He points to the success of Brazil’s Bolsa Familia (Family Allowance) programme, whereby 0.5% of GDP is allocated to social grants, but with conditions: recipients are required to enrol their children in schools, meet school attendance targets, and submit to basic health supervision. According to the World Bank, this programme has cut extreme poverty by half, increased life expectancy and reduced income equality by 15% in less than 15 years.

The programme, which has now been adopted in various forms in 40 other countries, is intended to arrest the transmission of poverty from parents to children, and wean the next generation off welfare completely.

Gigaba’s budget was more realistic than those of his predecessors in the sense that he did not puff up SA’s growth prospects. But the road ahead is grim, with growth unlikely to punch above 2% in the next two years. At that level of growth, you can forget about meaningful job creation.

 

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Social grants without responsibility is a disaster. We have created dependency just to appease the masses and for vote-winning!

Time SA grows up and realise we are still on the decent, albeit slowly this time

S.A. is promoting growth in baby production through its child support grants. Then tries to offer substandard free education and medical services to these subsidised children, only to become part of the exceedingly high unemployment and massive poverty statistics as young adults. This, whilst the rest of the world are actively limiting population growth through birth control measurements and in exporting some of their over-population to other countries (i.e. Asia). It makes a lot of sense.

Here in Oudtshoorn having a baby while you are still a child is big business – ask the grandparents who run the largest child minding business caring for this ill conceived spawn as their grandchildren roam the streets in rags begging, while their ” employees” and ” mothers” are out on the town with prospective new “father’s” making even more babies to loot the taxpayers, who work for their ” social benefits” that’s Marxist socialism ala anc for you!

PS – nice profitable “work” if you care for it!

That’s what you get for paying people to do nothing.

and when try and employ and buy votes. ANC and friens have stuffed SA in true Africa style with their corruption and socialist babble.

Thomas Sowell put it so well:

“In short, the political left’s welfare state makes poverty more comfortable, while penalizing attempts to rise out of poverty.”

“Even when they have the potential to become productive members of society, the loss of welfare state benefits if they try to do so is an implicit “tax” on what they would earn”

“The agenda of the left — promoting envy and a sense of grievance, while making loud demands for rights to what other people have produced — is a pattern that has been widespread in countries around the world. This agenda has seldom lifted the poor out of poverty. But it has lifted the left to positions of power and self-aggrandizement, while they promote policies with socially counterproductive results.”

I don’t see a point of return on this

Indeed, once people are trapped in the cycle of poverty and welfare dependence, few will escape.

This social grants policy is entrapment of the people into permanent poverty by the government.

DAH !!!! This is why Socialism has failed in every country it is tried!!!!!Take from the people who work and give to deadbeats! Some people need this BUT there are a class of Gimmee’s that just take and you help them stay subservient and voting ANC, so that Gubment can run there lives THUS keeping you employed !!!!!!!!!!!

In my mind I picture a tick sitting on its’ host, the dog, but the tick is larger than the dog on which it lives. This will not have a happy ending for either the dog or the tick !

Even a natural parasite knows not to become bigger that the host, or it will kill the host and both will die.

Ja no well fine. Add the 2 numbers and you get to 33.8 mil.

If we believe the much quoted number of 55 million ( and rising) people in this country then is the difference of 21.2 million the children and students merrily making their way into the social grant system in the near future???

God help us all!!!!!

Waiting to join which of the two queues – employment or grants?

Yip this is directly a product of the ANC (another new corruption) bad education program of not actually educating the country AND their socialistic ideas that don’t worry the state will look after you and you can just toyi toyi and be difficult in work and refuse to actually work, AND by the way the state will bring in a backward system called BEE so we can just sit on our morals and do absolutely nothing, SOMEBODY ELSE MUST WORK AND PAY!!
The only problem with this whole system is that you run out of other peoples money in time !! HELLO SA HERE WE ARE!!

Politicians and the media and economists keep telling us that the latest budget is anti-poor. It’s not. It’s anti-middle class. As far as I am now concerned the poor can f*** themselves. They benefit far more from government services and facilities that they are not paying for than the taxpayers who are paying for them and the results are the welfare state we are living in now. Because of this I no longer make charitable donations to anybody. Instead I put that cash away for my own retirement which, if things keep going the way they are, is likely to be very short and very painful.

Let me share with you another side to this sorry saga.
A family friend has been a policewoman for some 40 years. Ten years ago she was redeployed to a Township police station.
Following the dishing out of social grants left, right and centre, the incidence of alcoholism amongst the “magoggos” – has skyrocketed. The intended beneficiaries (children) don’t see a cent.
Unintended consequences? ?

Don’t be scared!! Show the pre 1994 employment stats!! Guess it doesn’t fit the narrative.

That’s socialism for you and the anc are just about to run out of wmc!

What has Moloto been smoking. centralised control to ”eleminate duplication of admin ”costs is a Trojan horse of the greatest magnitude- all it is a disguise to take away control of DA run PROVINCES AND municipalities which are run better than Anc.
equivalents.
Our local Roodepoort council was a pleasure to deal with in the old days- now that we come under the greater Jhb things do not get done , the streets look like shit unless we clean them ourselves. when one has to go to Braamfontein to submit docs etc it is like entering a war zone, and needs multiple visits EVEN WITH MASHABA OF THE DA BEING MAYOR.

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