South Africa could eventually move to a basic income grant in stages
There is growing interest in the concept of a basic income grant in SA, brought to the fore by the devastating effects of Covid-19. Many years after civil society and economic advisers first raised the debate, it is once again a proposal deserving our attention as we face up to the horrendous economic damage brought about by the pandemic, and the desperate plight of the majority of South Africans under the double burden of poverty and inequality.
The Black Sash has launched a report, carefully analysing the arguments in favour of such a grant, explaining what it could entail, how it could benefit individuals and the economy as a whole, and what the costs and effects could be. Simultaneously, the organisation launched a petition, supported by a considerable number of other non-profit organisations, addressed to the president and ministers of finance and social development. The research report that accompanies the petition suggests how the necessary funding could be achieved.
The subject is so important that it should not be left only to organisations serving the interests of the poorest sectors of our society. Those interested in the topic should include businesses looking for markets, economists exploring different models, investors and entrepreneurs, and all people who seek to live in a society less fraught by division and strife. The petition will gather strength if it is endorsed by a wide cross-section of the population.
The concept of a universal basic income grant, as it has generally been defined, is one of an equal payment made by the state to every person, or citizen, of a country, from birth to death, regardless of whether that person has an income. This confers the dignity of equal status to everyone, eliminates the need for any means test or other qualification (thus saving the state the expense of maintaining a system to administer such tests), reduces the risk of corruption in the administration process, and allows for an immediate end to absolute abject poverty. It creates the incentive for a rapid injection of expenditure into the economy as people acquire the ability to buy food and other necessities.
The world is seeking a path out of the dreadful effect of the virus
Those who already have an income from employment or investments could also use the additional spending power to boost expenditure, while increased tax revenue would accrue to the fiscus.
This is not at all the same thing as the temporary “Covid-19 grant” recently introduced to address the situation of unemployed people between the ages of 18 and 59. The difficulties experienced by the department of social development in administering this grant have shown how complex that system is, where checks have to be carried out as to whether the applicants meet all the necessary criteria to qualify for it. Nevertheless, it has brought vital help to millions of people, and has provided useful lessons both in terms of administration and as an illustration of its benefit.
Can SA manage to extend this to provide a universal, cradle-to-grave basic income grant to every person at this stage of the pandemic? Possibly not, and this is the reason the Black Sash proposal, and the petition itself, calls for a more limited response, as follows:
We call on the government to fulfil its constitutional and international obligation to provide social security by providing social assistance for those aged 18-59, including caregivers who receive the child support grant.
The government must:
- Implement permanent social assistance for those aged 18-59 valued at the upper-bound poverty line, now R1,227 a month. Caregivers who receive the child support grant must qualify for this grant.
- Make the Covid-19 grant increases of R250 a month permanent for all social grants.
- Ensure the above provisions apply to refugees, permanent residents, asylum seekers and migrant workers with special permits.
- Work towards a universal basic income.
Other countries are exploring similar ideas. Brazil has had a family benefit known as Bolsa Familia for a number of years, and recently introduced a Covid-19 relief grant for unemployed people. I have been informed that the amount was initially established as 600 real a month (R1,875) and double this amount for women deemed to be heads of their families, but that the amount is now being reduced to 200 real (R625) until December. There are several conditions, and it has been difficult to reach people who may not have internet access, or even identity documents. Nevertheless, it has been a lifeline for millions of people. It will be interesting to know what effect it had on the economy.
This option is too urgent to ignore. The world is seeking a path out of the dreadful effect of the virus, while growth and development are needed as quickly as possible. Governments everywhere need the support of the wealthy sector of society to level the deep ditches of inequality that prevent steady growth. Every member of society could benefit in different ways from a partial or universal basic income grant. We cannot rely only on foreign investment or loans, so we should look to building on our own resources.
For the immediate future, let us urge our government to implement this basic income grant for those who are unemployed, between the ages of 18 and 59, bringing instant relief to thousands of people, and at the same time provide the impetus for growth that is so greatly needed. In the longer term, it will provide a template for a universal basic income grant.
Mary Burton is Black Sash patron.
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