Today's Labour News

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southafricalogoBusiness Report writes that the investment community has shot down as unfeasible the proposed multibillion-rand basic income grant scheme that the government is mulling introducing to curb poverty.

President Cyril Ramaphosa on Sunday indicated that the government was investigating the feasibility of introducing a basic income grant in SA. Investors reacted by indicating that they would await more clarity on the full cost to the fiscus that this new grant would entail as more than a third of the SA population was unemployed. Anchor Capital’s Casey Delport said on Monday that as things currently stood, they had a mixed view on the implementation of a basic income grant. Noting that from a socio-political perspective there was indeed a strong argument to be made for its implementation, she said that from a fiscal perspective, “the situation gets a tad murkier”. Delport pointed out that the National Treasury simply did not have the funds available, which left questions as to who would carry the fiscal burden as new debt issuance was also not possible. She added that the grant “will not address the long-term structural issues in the economy that desperately need to be solved.” Old Mutual Investments chief economist Johann Els said the fiscus could not afford both the basic income grant and national health insurance amid a weak economic growth trajectory. He speculated that maybe in 10 to 15 years’ time the scheme would be affordable when the fiscal position had improved.

  • Read the full original of the report in the above regard by Siphelele Dludla at Business Report

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