Pretoria: Deputy Finance Minister Nhlanhla Nene says preliminary indications are that South Africa’s spending on social grants is sustainable.

“There is often concern that this level of spending on social grants or “hand outs”, as people often refer to them, is unsustainable,” Nene said in his address to the Woolworths board on Monday.

“Preliminary indications are that the trajectory of social spending as it currently stands in the budget is sustainable,” he said.

To date, social spending that comprises social assistance, education, health, housing, recreation and community amenities accounts for 58% of government expenditure – up from 49% a decade ago.

By March 2012, the number of social grant beneficiaries reached 15.6 million.

Nene said that grants were one of the main tools through which the budget redistributed income from rich to poor households.

“Such redistribution is crucial to address high levels of poverty and inequality in our country. However, we understand that while grants are necessary, they are not sufficient to address inequality over the long term. For that, we need to empower people with education and the skills to become productive members of society,” said Nene.

The economy also needed to grow faster so that companies could expand investment and employ more people.

Nene said the global economy remained in a precarious position and the country needed to ensure its economy become more competitive and productive.