South Africa has one of the highest fiscal spending on social protection of any developing or emerging market country in the world, the Pretoria high court heard on Wednesday.
Counsel for the National Treasury, Gilbert Marcus SC, said this was the correct starting point for the court when it considered the case brought by the Institute for Economic Justice (IEJ) and #PayTheGrants challenging constitutionality of the regulations governing the Social Relief of Distress (SRD) grants.
The two organisations went to court challenging several aspects of the current iteration of the regulations that govern the SRD grant, now set at R370, saying the regulations are unconstitutional and unlawfully exclude millions of people eligible to receive them.
The National Treasury’s main argument in the case was that the orders sought by the IEJ and #PayTheGrants are unaffordable and that they are asking the court to second-guess the government’s budgetary choices.
In court on Wednesday, Marcus said no-one disputed the extreme levels of poverty faced by far too many South Africans. The Treasury’s appreciation of this fact was at the root of its approach to the budget as a whole. He detailed several plans the government had for addressing poverty, which put social assistance in the broader context of growing the economy and building job opportunities.
The fiscal position of the state was “extremely serious”. Expenditure exceeded revenue by R321.6bn for 2024/5, he said. But, said Marcus, if the IEJ and #PayTheGrants were to succeed in some of their claims, it would require “substantial expenditure” and the money had to come from somewhere.
Marcus said counsel for the two organisations, Jason Brickhill, had been “cavalier when it comes to the question of budgetary constraints”.
“There is this unspoken assumption well, the money is always there. But that is devoid of reality,” he said. “At best for the applicants there are different philosophical and ideological approaches to the problem. But such differences — and this is the critical point — are not matters for judicial determination. They are matters which are fought out, ultimately, in elections.”
The SRD grant was a “temporary measure” that was put in place during the Covid-19 pandemic and remained a temporary measure, he said. This was clear from the regulations that governed it. “Social assistance, at least in the form of relevance here, is meant to be a stop gap measure,” he said.
Marcus was addressing an argument by Brickhill on Tuesday that various statements made by the president and other members of the government had signalled that government’s policy position was that the grant was here to stay.
This was relevant to one of the orders the two organisations sought from the court — they want the court to order that the minister of social development has a duty to devise a plan for the future implementation of the grant. Brickhill argued that because the grant’s value in real terms had stagnated over the years — with only a R20 increase this year — this was a “retrogression”, a breach of the constitutional duty to progressively implement the constitutional right to social assistance.
But Marcus argued there had been no retrogression. He said the progressive realisation of the right to social assistance should be looked at “holistically” — by looking at all the social grants provided by the state over the past 20 years. Looked at in that way, the progressive realisation of the right to social assistance was “beyond dispute”, he said. But even if the SRD grant was looked at on its own, there had been progressive implementation: the very fact of its introduction was a progressive step. Then, the income threshold to qualify for it had been raised in 2022 and this year it had increased by R20, he said.
Marcus also addressed the other challenges to the regulations brought by the IEJ and #PayTheGrants, including to the online-only application system, which made it difficult for people with limited access to smart devices and the use by Sassa of banks and government databases to verify whether people qualified for the grant. The two organisations argued on Tuesday that these verifications systems wrongly excluded millions of deserving recipients.
It is about lifting people out of hunger — the 20% of our population that currently live in hunger [and] who routinely send a family member to beg for food.
— Jason Brickhill, counsel for the two organisations
Marcus said there was an “obvious need” for procedural safeguards to prevent the misuse of public funds. The IEJ and #PayTheGrants had recognised as much, he said. The debate then became about “the nature of those safeguards but not the underlying need for those safeguards”.
However, under the law, a court could only intervene if those safeguards were unreasonable. “The test of reasonableness affords the state a range of options,” said Marcus. If the safeguards “fall within that range, there is no scope for judicial interference”.
The bank and database verifications were measures “to minimise fraud and wastage, to ensure that eligibility criteria are met and to promote efficiency”. Even if there were better options, the reasonableness test “does not inquire whether other more desirable or favourable measures could have been adopted”.
He said the online application system and the bank and database verification systems passed the test for reasonableness, even while he accepted “that there are going to be people who fall through the cracks. There is no system that is perfect”.
The Treasury had earlier conceded the IEJ and #PayTheGrants’ attack on the regulation that disallowed new information to be brought when someone was refused the grant and was appealing against that decision. Treasury agreed with the applicants that a “wide appeal” should be allowed and that recipients should be able to bring new information — for example showing that they were wrongly included on the UIF database as getting money from the UIF.
Marcus argued that with a wide appeal, any merit in the attacks on the verification methods fell away. “Once there is a wide appeal and an error arises in any of the verification methods used, that can be corrected on appeal,” he said.
But in reply, Brickhill said this was no answer. Referring to the evidence of just how bad some of the databases were — for example the labour-related databases had a 35% error rate, Brickhill said: “Something should be done about the endemic problems of the databases; and the constitutional responsibility rests with the department and Sassa.”
Brickhill also said the government’s bigger plans to alleviate poverty were “totally irrelevant” to the case being argued here. The constitutional duty was to have a plan on the SRD grant value and income threshold, he said.
He said the Treasury was approaching questions of affordability in this case as if they were “a technical, arithmetical” exercise, in a context where the SRD grant “is all about hunger”.
“It is about lifting people out of hunger — the 20% of our population that currently live in hunger [and] who routinely send a family member to beg for food.” Budgeting was “not some technical exercise in mathematics ... It is one of the most profound powers conferred by our constitution and every constitutional power exercised by a constitutional state is subject to the bill of rights,” said Brickhill.
Judgment was reserved.
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