Enoch Godongwana, Finance Minister, on protecting the poor from the impact of rising costs

Finance Minister Enoch Godongwana stated that there is a valid argument for protecting the poor from the impact of rising living costs, but determining the type of assistance that should be provided and how to pay for it is still a work in progress.

“We need to discuss what is the appropriate form of cushioning the vulnerable,” the minister said in an interview in Johannesburg on Thursday. “The next set of issues then is how are we going to fund that.”

Following the onset of the coronavirus pandemic in 2020, the government began paying low-income households monthly grants of R350, and the temporary stipend has been renewed three times since then. It was extended until the end of March 2024 last month. Civil rights organisations have been pushing for a permanent income grant, which the National Treasury has so far resisted.

According to Godongwana, additional assistance can only be funded through additional taxes, reprioritization of spending, or a combination of the two. However, raising personal income taxes will exacerbate the problem of rising living costs, raising corporate levies will result in job losses, and the value-added tax is a blunt instrument that harms both the rich and the poor,” he said.