21 April 2025
Support for measures to stimulate economic growth and advance social transformation through the social wage
The ANC has always advanced a fiscal framework that prioritises the social wage as a key aspect of addressing the injustices of the past to ensure all South Africans have access to basic services. As the ANC government, we have made access the norm rather than the exception. We have shifted the national fiscal framework to support the most vulnerable and to improve living conditions in rural and township areas. We have a redistributive tax system that allocates revenues collected in urban areas to support underprivileged areas. This was not the case before 1994. Household access to electricity for lighting increased dramatically from 58.1% in 1996 to 94.7% in 2022. Since 1994, the government has facilitated the construction of over 3 million subsidised homes, providing secure housing for roughly 13 million people. Access to piped water (inside dwelling/yard) grew to over 82% by 2022.
These are not just numbers but a reflection of the improved living conditions of the majority of South Africans. Yes, we are experiencing challenges with regard to the reliability and affordability of various services.
To cushion the poor, the government has embedded an indigent policy framework which provides meaningful relief for the poor through the provision of free basic services such as water, electricity, sanitation, and refuse removal. A total of 11.2 million indigent households nationally are currently subsidised for the provision of free basic services through the Local Government Equitable Share, and thereby concluding that there is a total of 8.4 million indigent households that are denied free basic services provision, while municipalities receive the subsidies for the provision of Free Basic Services. This requires all municipalities to improve their management and accessibility of indigent support, which will go a long way in alleviating poverty and the cost of living for the poor.
We call all citizens in distress without sufficient income to go to their municipalities and apply for indigent support.
The Division of Revenue supports programmes which continue with the work done by the democratic government to improve the living conditions of the majority.
Provinces shoulder the primary responsibility for delivering social services, including providing basic education for 13.6 million learners and healthcare for the 53.4 million people without private medical insurance. Direct national transfers to provinces are projected to grow by an annual average of 3.4 per cent.
Over the next three years, provinces are allocated an additional R32.3 billion, of which R9.9 billion supports employee compensation pressures in education. An additional R21.3 billion is allocated for health sector compensation, employment of doctors, and making up for shortfalls in goods and services expenditure. The Prioritisation of R24 billion for Health Facilities Revitalisation is a commitment to improve the quality of health facilities. As the ANC in parliament, we have advanced a focus on ensuring that, like the ideal clinic programme, which the government is excelling in, our focus should be on ensuring we increase compliance with the ideal hospital standards, and the National Treasury must allocate funds for this purpose, including crowding private capital. The National Health Insurance should be realised in our lifetime to restore the dignity of the majority and to address structural inequality in our society.
The DORA also includes measures to restructure some of the grants to streamline their mandate and impact, and avoid duplication. In local government, the integrated national electrification programme (municipal) grant will be merged with the energy efficiency and demand-side management grant. The urban settlements development grant is being reconfigured: its metro trading services component, R19.5 billion, is moved to the urban development financing grant, and over the medium term, R8.6 billion is added to the performance-based urban development financing grant.
Despite the advances in increasing access to housing. Many South Africans, particularly in urban areas, continue to live in informal conditions. Living in a shack without various basic services is not the promise of a better life. Since the sixth administration, the ANC has implored an increase in funding for the informal settlement grant. Major increases for Informal Settlements Upgrading Partnership (ISUP) Grant by 107 per cent are made in the division of revenue, reflecting the increased focus on transitioning informal dwellers to proper housing facilities in well-developed human settlements with access to all critical services required to harness an environment where our people live in dignity and safety.
The comprehensive agricultural support programme grant and the Ilima/Letsema projects grant are being combined to streamline support to emerging farmers. The Comprehensive Agricultural Support Programme (CASP) increased significantly by 34.5 per cent, reflecting our commitment to increasing food production and food security through supporting small-scale and emerging farmers who require support for production.
As part of supporting the financial viability of municipalities and addressing the municipal debt problem impacting Eskom, a key technological reform is the Smart Meters Grant Programme, which is allocated R2.5 billion over the MTEF period. In 71 debt-stressed municipalities, the programme has
already installed over 139 000 smart meters, with 96 400 more planned for the next budget cycle. We are indeed fixing local government and ensuring we adapt our billing systems through technology.
Our concern as the ANC is the circumstances of reprioritisation of funds from one priority to another without mitigating the impact of reprioritisation. We are confident that through this Division of Revenue, we will move closer to ensuring basic services are affordable and reliable. We are confident that through investment in social and economic infrastructure, we will create conditions for inclusive economic growth and job creation.