Government Mulls Over Tough SRD Grant Decision

South Africans are keenly awaiting the delivery of the 2025 Budget Speech. At least 8 million citizens will be listening to the government’s decision to implement the Social Relief of Distress (SRD) grant.

The 2025 Budget Speech was written and set to be delivered to the country on 19 February 2025. However, minutes before Finance Minister Enoch Godongwana was set to speak, news filtered through that Government of National Unity (GNU) parties reached an impasse regarding the increase of Value Added Tax (VAT) by two percentage points.

This impasse led to the postponement of the Budget speech and forced parties to come to an agreement regarding the budget.?

According to leaked budget documents, the increase of VAT by two percentage points would have enabled the implementation of the SRD grant for an additional year. The grant's implementation was set to conclude in March 2025, but the extension would guarantee relief for an additional twelve months.?

In the lead-up to the delivery of the Budget Speech on 12 March,?Finance Minister Godongwana conceded that an extension to the SRD grant is only possible through economic growth.?

In the absence of finding a revenue source, you're going to have a problem.

Godongwana argues that merely introducing such a grant in a stagnant economy, where unemployment is already a structural issue, would be counterproductive.

It's structural unemployment, you cushion the impact of structural unemployment, but let's find a revenue source to do that.

The SRD grant?was introduced during the COVID-19 pandemic when lockdowns prevented unemployed individuals from finding work. While the lockdowns ended, the?SRD grant has been extended on several occasions.?

Currently, the SRD grant is the only financial support for unemployed people living in South Africa. All eyes will be on Cape Town where the Finance Minister will deliver his speech and provide an update on the future of the SRD Grant.