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The National Treasury this week passionately argued before the Supreme Court of Appeal (SCA) that expanding the SRD grant could cost up to R139bn a year — something the fiscus cannot afford.On the opposing side, the Institute for Economic Justice and #PayTheGrants have argued that the grant, first introduced at the height of the 2020 coronavirus pandemic to alleviate pressure on the poor, had become a permanent feature of South Africa’s safety net and there was fiscal room to increase it.National Treasury went into the case on the back foot, having already lost the argument at the high court.The Treasury and its sister department, social development, and its entity, the South African Social Security Agency (Sassa), seek to overturn a Pretoria high court decision that ordered the government to remove numerous administrative barriers that locked out about 10-million people from accessing the grant and to increase its monetary value.The effect of the high court decision is to expand the grant to 18-million people, from the current 8.3-million, and hike it from R370 per month to about R450 — R65bn higher than in the 2024/25 financial year.Judge Leonard Twala found in February 2025 that the affordability, or lack thereof, of the SRD was insufficient reason to exclude millions of South Africans who qualified to receive the assistance and that the SRD had become a permanent feature of life in South Africa.“It is unthinkable why the government and National Treasury in particular should not plan and budget accordingly to fulfil their obligations in terms of the constitution,” Twala ruled.“It is unconscionable for the government to accept that the number of people who are without sufficient means to support themselves and their dependants is more than 18.3-million but only budget to provide for 10.5-million.”This judgment tests the constitutional limits of the sacred separation of powers doctrine. At the heart of this doctrine is that courts hold the executive accountable without overstepping into budget-making and policy formulation, powers that belong to the executive and legislative branches.Whatever the SCA finally decides, this doctrine, the key to entrenching respect for the rule of law, must be maintained.The National Treasury has committed the country towards a fiscal consolidation path designed to stabilise public finances, reduce budget deficits, and lower debt-to-GDP ratios through disciplined spending and revenue controls.This is the power that correctly belongs to the executive. However, the debate over the fate of the SRD grants exposes the lack of fidelity by the executive to stay true to its commitment to implement the proposed Basic Income Grant (BIG) — a social assistance policy aimed at supporting the vulnerable, unemployed working-age population.Lack of clarity on this policy position adds fire to fuel. These are weighty policy issues that the executive must grapple with, guided by the fiscal position of the country. This economy cannot afford to borrow itself out of the structural constraints that inhibit growth and job creation.The Constitutional Court will also grapple with the power of the National Treasury in adjusting the VAT rate on Thursday.Treasury will argue that denying it limited powers to “swiftly” adjust the VAT rate to respond to pressing fiscal pressures, as it attempted to do last year, will see the government taking up more debt to plug holes in the budget.The DA will, on the other hand, argue that the constitution grants the power to tax to parliament and does not permit it to delegate that power.Both these matters are of crucial importance to not just the fiscus but also South Africa’s constitutional architecture. There is no room for error, as what the courts find will be binding for future generations.Business Day
