Sunday Times reports that the government would have to raise VAT or close dozens of state programmes to lower spending enough to allow it to continue with the R350 social relief of distress (SRD) grant beyond March next year.

This was the stark message believed to have been delivered to President Cyril Ramaphosa and his ministers at a top-level meeting with National Treasury officials last week. The meeting followed the release of a Treasury memo warning that the government faced unprecedented revenue and spending pressures as the economy faltered amid load-shedding, inflation and stagnant growth. Treasury is said to have suggested that the grant could be funded by a two-percentage point increase in VAT or the ending of dozens of government initiatives. These include visible policing, the expanded public works programme, the mine health and safety inspectorate, welfare support and environmental protection, and other intervention programmes on food security and informal settlement upgrades. The Public Servants Association said it was “extremely alarmed” at the proposed cuts. Nehawu’s Lwazi Nkolonzi reacted: “We cannot support such proposals as they will be to the detriment of our members, workers and the working class.” Cosatu’s Matthew Parks said: “We will not agree to any cuts that will weaken the capacity of the state to deliver public services.” Sadtu’s Mugwena Maluleke said the union was willing to engage with the government. Saftu’s Zwelinzima Vavi said the crisis was “self-inflicted”.

• Read the full original of the report in the above regard by Khulekani Magubane, Amanda Khoza & Kgothatso Madisa at Sunday Times (subscriber access only)

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