Jan 2008

Where does Government money come from? How is it spent?

Government is set to announce the country's budget for 2008. This means we will know how much money government will spend and what it will be spent on during the year. 

The different national departments will each receive a set amount of money to help government to achieve its aims of creating a better life for all.

Economic growth

But where does the money come from? In South Africa, government does not play a direct role in the economy. Its main role in the economy is to encourage economic growth. 

For example, government does not own big factories or mines to earn an income. It only partly owns big corporations like Eskom and Telkom. But the money earned from such companies is put back into the economy. This helps the economy to grow and creates conditions that encourage privately owned industries to succeed.

Taxes

The money given to the national departments comes mainly from taxes paid by the country's people and businesses. Only people who have jobs and who earn more than a certain amount of money per month have to pay tax. The amount each person pays is worked out according to what he or she earns. Taxes are also paid on goods that are imported into the country from other countries.

The tax money is used to fund necessary services that people often take for granted. These include health care, safety and security, housing, roads, railways, harbours and communications. 

It also includes social grants like child-care and disability grants. Many people receive these grants unlawfully, which not only robs real beneficiaries of their money, but also has a negative effect on the country's economy.

Misusing funds

Misusing government funds could force government to increase taxes. It could also mean that money, which could have been spent on other important services like fighting crime or improving health services, must go to the social department. We should therefore never tolerate corrupt practices; it robs everyone of a better life.

Creating jobs

Another way in which government encourages economic growth is by putting money into infrastructure development. Recently government put billions of rands into the Expanded Public Works Programme (EPWP). The purpose of the programme is to boost the economy by reducing unemployment and developing skills. 
This is achieved by giving unemployed people jobs in projects like road construction and building. In this way they not only earn money, but also receive on-the-job skills training.

- Muzi Mkhwanazi


Boosting agricultural growth

Small farmers in North West are replacing old farming methods with modern methods. Thanks to the tools given to them by government, these farmers will be able to produce more products and make a profit form their land. It is now easier for them to work the large pieces of land they received from government through the land redistribution process.

A blessing

Many of the farmers who received tools belong to the Iphuteng Youth Co-operative. Deputy Chairperson of the co-operative, Dithole Mokoma, said the farming tools were a blessing. Mokoma and his partners are farming a very big area and had no tools before. The tractor they got from government makes it possible to do what was impossible. 

The co-operative received tractors, cultivators, ploughs and planting machines.

They grow maize, sunflowers and vegetables and raise chickens. All their products are sold to local people in the province.

"I am really happy about the help we are getting from government. I have no doubt that our farm will become a successful business," Mokoma said.

Agricultural programme

The help given to the Iphuteng Youth Co-operative is part of government's Comprehensive Agricultural Programme (CASP). 
The programme offers support to farmers who got land through the land distribution programme. 

Government also helps small farmers through the Micro Agricultural Financial Institutional Scheme of South Africa (MAFISA). MAFISA helps small farmers with money to start new farming businesses and to develop them into successful enterprises.

Jobs

Another farming project in the North West, the Mooifontein Central Primary Agricultural Co-operative, received a huge tractor worth over a million rand, five smaller tractors, ploughs and harvesting tools.

The co-operative administrator, Mompati Motlogedi, said the new tools would help them to reach their goal of running a successful farm from which they could make a lot of money. 
He said the farm used to employ lots of people before. Their dream is to restore it to its former glory and give jobs to many people. 

Their success will thus also help to improve the lives of others and to reduce unemployment Motlogedi said. "Government has put trust in us and the only way we can repay government is to succeed," he said.

- Muzi Mkhwanazi


The right to social security

To fight poverty, government offers different grants to meet the needs of poor people. All beneficiaries of these grants, must be South African citizens or permanent residents and must have valid South African identity documents.

Old age

The old-age grant is normally referred to as an old-age pension. Women who apply must be older than 60 and men must be older than 65. You must not be receiving any other social grant and must not be cared for by the state in an institution.

Disability

To get a disability grant you must be unable to support yourself because of your disability and have very little income. You must be 18 years or older. 

You must also have a medical assessment report confirming your disability. You must not be cared for by the state in a state institution and must not be receiving another social grant.

War veteran

To apply for the war veteran grant, you must be 60 years or older, or disabled, and you must have fought in the Second World War or Korean War. You must not be receiving another social grant.

Child support

  • The foster care grant is meant for poor people who are taking care of orphans or children who have run away from their families. To apply, you must have a court order showing your foster care status. You must have valid South African identity books for the child or children that you are caring for. The grant must be used to provide the child with enough food, medical care, clothing, schooling and shelter

  • For the care dependency grant, the child should be between one and 18 years old. The applicant must submit a medical assessment report confirming disability. The applicant must have an identity book and a 13-digit birth certificate for the child.

  • The child support grant is given to people who cannot afford to support their children. The child or children must be younger than 14. The care-giver must have an identity document and the child must have a birth certificate.

Grant in aid

This is for people with physical or mental disabilities who need full time care. A person who applies for this grant must not be cared for in an institution that receives money from the state. Applicants must be a social grant receiver.

Social relief of distress

This is a temporary grant to help poor people who are unable to meet their family's most basic needs. People who are waiting for permanent aid qualify for this grant. It is issued monthly for a maximum period of three months.

- Muzi Mkhwanazi


Cobras bite social grant cheaters

A few years ago, the social grant system was troubled by corruption, bad management and fraud. Some government officials also claimed social grant money for themselves. 
 
To stop this from happening, Social Development appointed the Special Investigating Unit to look into the system in early 2005.
 
Saved billions
 
Almost three years on, the Cobras, as the Special Investigating Unit is known, has already saved government close to R8 billion.
 
The Cobras work together with the South African Security Agency (SASSA). They employ nearly 200 investigators who focus mainly on government workers and those who are benefiting in the private sector.
 
Since it started, the unit has also found organised crime groups who were cheating the Social Pension System. Some of these groups and individuals are from outside the country. They focus mainly on disability grants and make fake medical certificates.
 
Across the border
 
The Department of Social Development found that at a border post between South Africa and Swaziland, at least 1 000 beneficiaries came across the border every month to collect grants in South Africa.
 
They expect to find that the same sort of thing also happens at the borders of other neighbouring countries, including Lesotho and Zimbabwe.
 
Court
 
Together with partner agencies, the Cobras have started to tackle the problem. So far about 5 500 cases have been taken to court. 21 588 government employees were on the system unlawfully, but have since been removed. 
 
Some of them will undergo disciplinary hearings. Action taken against them will range from warnings to being fired from their jobs.
 
- Ndivhuwo Khangale
 
 

Taking steps

 
Part of the Cobra's responsibilities is to re-examine and improve the social grant system. They must also make recommendations to the Department and to SASSA on how to fix the problem areas in the system. Steps to be taken include:
 
  • Carefully checking information from applicants before disability grants are approved.
  • Marking applications that were previously refused, or where grants were cancelled because they were unlawful.
  • Double checking referrals from doctors and re-looking at medical files.
  • Visiting homes to prove that children registered on the system really exist, especially in the case of foster care grants.
  • Making sure that all Home Affairs officials can be clearly recognised.
 
To contact the Special Investigating Unit, call: 086 0748748

 

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