The Welfare Cost of Not Paying the Grant

C02

The average industrial outcome in the companion paper does not clear this central welfare hurdle. Only an exceptionally well-executed industrial programme clearly beats it, and the later beneficiaries are not automatically the households who gave up the grant.

GSX:SRD-002:C02 · Modelled · Conditional · high sensitivity · Version 1.0

Depends on

A01Same envelopeThe withheld resource is about R253.5 billion in constant 2026 purchasing power, the same base as the industrial-fund paper.moderate sensitivity

A02Distributional weightsIn the conservative, central and severe cases, R1 of consumption at the recipient margin is valued at R1.10, R1.50 and R2.00. The weights are normative assumptions.high sensitivity

Modelled results cited

R01Central welfare caseThe explicit welfare-equivalent cost of withholding the envelope is between R237 billion and R743 billion. The central estimate is R426.9 billion, about R1.68 of social cost for every R1 withheld.modelled

R02Seven-year poverty exposure rangeAdditional poverty exposure across the scenarios is 2.5 million to 11.0 million person-years.modelled

Registered supporting sources

The Welfare Cost of Not Paying the Grant · GSX:SRD-002:PDF

C02

The comparison is between a public asset and a social cost. It does not say that cash transfers are always better than investment.