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A genie granting grants is wishful thinking

7th July 2017

By: Riaan de Lange

     

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It is said that there are three wishes that a genie cannot grant. It’s still on my bucket list to find one, which I fear would only be possible through divine intervention. But I cannot wish for that. Oops – I should have said spoiler alert!

So, just in case you ever stumble across a genie, remember that there are three things that you cannot wish for or ask of a genie. You cannot wish anyone dead. You cannot wish to be a higher-dimensional being. You cannot wish for more wishes – infinite wishes. But a word of caution: be careful, for you might well get what you wish for and more. It is the ‘more’ that should worry you.

Although a genie can grant you three qualifying wishes of your heart’s desire, it will never grant you a grant. If you desire a grant, then you need to look elsewhere. But where? You simply need to look to Meintjieskop. On Meintjieskop, you will find an iconic building dominating its surroundings – the Union Buildings, the seat of the South African government. You could also consider the Union Buildings the custodian of grants.

So, how do you access a grant? By applying for it. You need merely to apply to, among others, the South African Social Security Agency (Sassa), which administers seven long-term grants, namely the grant for older persons, the disability grant, the war veterans’ grant, the foster child grant, the care-dependence grant, the child support grant and the grant-in-aid.

It all sounds too good to be true, and when something sounds too good to be true, it usually is. For government to be able to pay grants, it needs money, which, in turn, requires it to obtain the money from taxpayers. The system works quite well if the taxpayer pays. It does, of course, help if the number of people applying for grants is contained.

Unless you have been outside the country in the past two weeks, you will have noticed that the South African economy is in recession. Yes, a recession, which is defined as a period of two successive quarters of negative growth. So, if the economy is not growing, the obvious question is: How will this impact on employment and tax revenue?

If you thought I was going to offer an in-depth economic analysis, then I have to disappoint you. In fact, I will do quite the contrary, but the effect – that I can promise – will not be less striking. What I will attempt is reminiscent of my father’s practice of making sense of life by scribbling numbers and executing calculations on the back of a matchbox.

Depending on your age, you may recall that the old Lion Match matchboxes, the 2c variety (yes, two cents), had the logo on the front only, while the back was blank. I could never understand the reason for that. Was the assumption that a matchbox would always land with the logo on the top, so that there was no need to have the logo on both sides? Whatever the reason, it gave my father ample space to perform calculations.

Just in case you have specific views on the accuracy of the figures that I will use, I will cite the source. However, if you are still not convinced, remember that it is said that the best figures are made up. If you want to take part in this activity, you can be greatly entertained by visiting the website of the Bureau of Made Up Statistics (http://www.bomus.org/), which claims to be ‘your one-stop source for instantly made up statistics’.

On June 23, www.iol.co.za reported that, according to an Institute of Race Relations (IRR) survey, there are more people in South Africa who receive social grants than those who are employed. Unsurprisingly, the institute considers this state of affairs to be a ‘recipe for disaster’. This reminds me of the advertisement of the Hotel.com website. Have you seen it? It features Captain Obvious, who, yes, states the obvious, but entertainingly so.

According to the IRR, in 2016, there were 15 545 000 people employed in South Africa, while 17 094 331 received social grants. This compares with 12 494 000 people who were employed in 2001 and 3 993 133 who received social grants during the same year. These figures indicate that, from 2001 to 2016, the number of employed people in South Africa increased by only 24%, while the number of those who depended on social grants increased by a massive 328%. These numbers become more shocking when one considers that South Africa’s population is said to bet 56 007 479.

Do you know how many taxpayers there are in South Africa? According to this year’s national Budget, South Africa has 7 400 000 registered taxpayers, but 6 500 000 of them fall below the taxable income threshold and, therefore, do not pay any income tax. So, effectively, South Africa has only 900 000 taxpayers.

Releasing numbers similar to the IRR’s, Louise Ferreira states that, as at February this year, there were 17 191 121 people on the Sassa-administered seven long-term grants, made up as follows: grant for older persons (3 295 710), disability grant (1 067 402), war veterans’ grant (180), foster child grant (428 568), care dependence grant (145 089), child support grant (12 092 183) and grant-in-aid (161 989).

Did you spot anything interesting from these numbers? Only 27.76% of South Africans are employed, with only 900 000 paying tax, while 17 094 331 people, or 17 191 121 people (depending on who you believe) are on social grants. Of those on social grants, 12 092 183 receive the child support grant, which constitutes 70.34% of Sassa-administered grant payments. The child-support grant is available for the main caregiver of a child who is 18 years old or younger.

If this is not enough to worry you, bear in mind that the National Treasury’s long-term fiscal study showed that “the current level of social spending will be sustainable as long as the economy grows by 3% a year”. It goes without saying that South Africa’s economic growth rate is not even close to this target. To repeat, the economy is in recession.

To add to the South African economy’s woes, on June 25, Liesl Peyper, of Fin24, reported that the South African economy was, unsurprisingly, no longer stable, according to the Fragile States Index, a yearly ranking of 178 countries based on 12 social, economic and political indicators that measure susceptibility to instability. Just to be clear, a higher country score indicates instability. According to the recent ranking, South Africa is ranked in 96th position, compared with 132nd in 2007.

So, what can be done? I am reminded of the Dusty Springfield classic,Wishin and Hopin’, released on August 8, 1964: “Wishin’ and hopin’ and thinkin’ and prayin’; Plannin’ and dreamin’ each night”. I truly hope that there is someone doing just that.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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