Does the targeted social relief grant punish work and perpetuate poverty?

News24

17-07-2025

The introduction of the targeted social relief grant (TSRG) on 1 June 2025 has been accompanied by quiet satisfaction in circles that believe government transfers are the solution to poverty.
At R720 per month, the new scheme replaces the basic income grant (BIG), which had ballooned into a costly and unsustainable experiment. The TSRG is being marketed as more focused, affordable and efficient.
But policies must be judged by their incentives, not their intentions.
The design of the TSRG discourages initiative. Any unemployed person who attempts to earn even a modest income – through part-time work, informal trading or entry-level employment – risks immediate disqualification.
The reward for productive effort becomes the loss of support. This arrangement fosters passivity, not upward mobility. Many recipients, acting rationally within the rules provided, will choose to remain idle rather than risk becoming ineligible.
When the state creates a condition in which individuals are penalised for trying to lift themselves out of poverty, it arrests their development and saps their self-respect. A population so managed becomes compliant but not empowered.
South Africa cannot afford such policies. The 2024 Fraser Institute Economic Freedom of the World Report placed the country firmly in the bottom quarter of nations globally. The reasons are clear: inflexible labour laws, an overextended state and punishing regulatory burdens. These are not abstract academic rankings – they are direct indicators of economic failure.
Unemployment remains structurally high, especially among young people, and entrepreneurship continues to be stifled under layers of bureaucracy.
Successful countries have taken a different route. In Singapore, the emphasis is on education, skills and enterprise, not permanent grants. Switzerland keeps welfare limited and locally administered, with strong expectations of personal responsibility. For decades, Hong Kong allowed markets to allocate labour and capital with minimal interference. The result in each case was widespread prosperity.
Financing the TSRG will impose real costs. Treasury officials have signalled the inevitability of new taxes. In practice, this means punishing those who are already carrying the burden of employment creation, capital formation and tax compliance.
These are the very citizens and businesses on whom recovery depends. A policy that extracts more from the productive to fund inactivity cannot produce long-term stability or growth.
The motives behind the TSRG warrant scrutiny. It is difficult to avoid the conclusion that the ruling party is seeking to secure votes through dependency rather than expanding opportunity. That approach is not merely fiscally reckless – it undermines the moral basis of citizenship and distorts the relationship between state and individual.
There are alternatives. The job seekers' exemption certificate (JSEC), long proposed by the Free Market Foundation, would allow unemployed individuals to opt out of harmful labour legislation that prices them out of the job market.
Freed from minimum wages, centralised bargaining and race-based hiring requirements, young South Africans could finally be allowed to trade their willingness to work for real, lawful employment.
Moreover, the state can find the means to assist the truly destitute without expanding dependence. It need only reduce waste. End cadre deployments. Liquidate bankrupt state-owned enterprises. Deregulate the informal sector. When government spends less and interferes less, private initiative thrives – and poverty recedes.
South Africans do not lack energy, talent or ambition. What they lack is permission to act freely in the labour market. The TSRG does nothing to remove the barriers holding them back. On the contrary, it strengthens them.
The path to prosperity does not run through a growing welfare roll. It runs through employment, trade and the free exercise of one's talents. If the government truly wishes to serve the poor, it should dismantle the obstacles to self-reliance – not deepen them.