MAVERICK CITIZEN

‘Rethink capitalism’ says Thuli Madonsela — activists and academics unite to call for Basic Income Guarantee

By Mark Heywood 29 April 2021

Social Justice Chair at Stellenbosch University Professor Thuli Madonsela. (Photo: Gallo Images / Esa Alexander)

Thuli Madonsela describes the call for a Basic Income Grant as ‘returning to Ubuntu… If I invest in you I am investing in myself. As a country, we are stronger when everyone amongst us is strong.’ In a webinar yesterday Madonsela also called for an urgent need for ‘rethinking capitalism’, noting that a secure ‘income is the basis for every other human right’.

With only one day left in April, the clock on food security is rapidly ticking towards midnight for the six million recipients of the special Covid-19 Social Relief of Distress (SRD) grant which expires on Saturday, 1 May.

On 28 April, activists rallied behind the call to extend the grant on several fronts. A joint press conference of the Black Sash and the #PayTheGrants campaign called for the grant to be extended until it is turned into a Basic Income Guarantee (BIG).

The press conference was followed a few hours later by a webinar held to launch proposals for a universal basic income guarantee that have been developed in a new Policy Brief by the Institute for Economic Justice (IEJ). The Brief (available here) provides a costing of a BIG, as part of government’s fulfilment of its constitutional obligation of ensuring the right of “everyone access to social security and… appropriate social assistance”. 

The IEJ researches a number of levels as “viable starting points” for such a grant — the food poverty line (R585 per person, per month), lower-bound poverty line (R840) and upper-bound poverty line (R1,268) — and finds such a grant affordable. It argues that it can be financed through adjustments to the tax system, including the introduction of a wealth tax.

The webinar brought together heavy hitters Prof Vivienne Taylor, former head of the Department of Social Development at UCT; Prof Madonsela, Social Justice Chair at Stellenbosch University; former #FeesMustFall leader Shaeera Kalla; and Saftu General Secretary Zwelinzima Vavi. It was also addressed by Daddy Mabe, a grant beneficiary and member of the Assembly of the Unemployed, as well as Lebogang Mulaisi, Cosatu’s labour market policy coordinator.

Taylor spoke first on why a Universal Basic Income Guarantee (UBIG) is important for SA in a post-Covid economy. She said the “constitutional, political, moral and economic imperatives had not changed since the debate started more than two decades ago” when she chaired the Committee of Inquiry into a Comprehensive System of Social Security which issued various reports and its final recommendations in 2002. Taylor pointed out how social security proposals had been on the policy agenda from 1998 to 2006, but were sacrificed to the values and beliefs of policymakers who “chose neoliberal arguments about the economy over investment in human beings”.

However, Taylor commended recent “encouraging shifts” by the government and the ANC to recognise a BIG, noting that they were driven by civil society. Covid-19, she said, ought to be a turning point. She disputed the adequacy of the current social security system which, even though reaching 17 million people, has a huge gap when it comes to the adult unemployed — more than 10 million people. 

Filling this gap, Taylor argues, is “a social justice imperative”.

Finally, Taylor spoke of the imperative of social inclusion, noting the millions “disengaged from society by poverty and inequality which fuels conflict and violence in SA”. Hunger breeds anger, Madonsela added later and Zwelinzima Vavi warned of a “coming social-political implosion” driven by the social crisis.

Taylor says that evidence shows how cash transfers to the poor support not only local economies, but can have a multiplier effect to benefit the broader economy as a whole. “The evidence shows that a BIG can contribute to macroeconomic resilience and acts as a stabiliser and buffer in times of economic crisis”, she argued.

Providing a BIG as a right reduces “arbitrary discrimination and corruption” in means-tested grants and would save on administrative costs.

BIG: ‘A constitutional imperative’

Madonsela agreed with Taylor on the social importance of grants, particularly for women, “a dialogue we have heard since the dawn of democracy”. She emphasised, though, that what made SA unique is that here social security was “a legal imperative, a constitutional obligation”. 

In a recent article, Madonsela said it was perplexing “why no income sustainability plan has yet been drafted by the department of social development. This would have ensured that when the grant ended, there would be another way to address the human development needs that it helped to meet — not least of which is simple food security.”

She said this element needed to be resolved “by close of business tomorrow. The SRD may not be enough, but it’s made a difference.”

Madonsela called for the need for “rethinking capitalism” because income, which is now denied to millions of people, “is the basis for every other human right”. 

Daddy Mabe spoke on why grants are important for the dignity of beneficiaries and communities. He criticised the stigmatising of grant recipients. “We want to work”, he said, “but the system cannot absorb all of us. It’s not because we are lazy.” His appeal to the president was “think of us as being your own children, so that tomorrow you don’t curse yourself for failing to implement what is obvious”. 

Mulaisi from Cosatu referred to “a level of avoidance in government regarding a BIG”, calling it “a political hot potato” and lamenting “never-ending discussions at forums like Nedlac”. This, she said, is why we need an effective advocacy movement and why the labour movement supports a UBIG.

Finally, Kalla talked about being “constantly snubbed by government” with letters and appeals not answered: “Government is not taking people’s lives and livelihoods seriously.” She said civil society will not be surprised when the grant is cut because last year the special Caregiver grant was terminated, long before the Covid crisis had passed for women and children.

Kalla noted that SA had ratified the UN International Covenant on Economic, Social and Cultural Rights (ICESCR), but said activists are “struggling to understand what mechanisms can be used to hold the government to account for failing to fulfil its obligations under international law.” She explained that activists were now using the language of a Basic Income Guarantee (rather than grant) to emphasise that there was a “moral and social right to participate in the economy” and that social security is not charity. 

“We cannot be silent. We cannot be sad or broken-hearted. We need to act.”  DM/MC

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All Comments 25

    • A BIG would put money into circulation, attracting VAT at every turn, partly self-funding it. No one can prosper if a large section of the population is desperately poor.

      • And yet still it needs to have the funding. And I am sorry, a simple “It argues that it can be financed through adjustments to the tax system, including the introduction of a wealth tax.” is not good enough. Currently and until state spending is reigned in SA cannot afford it.

        • Cont. keep in mind that the public wage bill is already a type of redistribution grant for many, as is the tenderpreneur system. The corruption we see is just another layer of that. We cannot support both these unofficial income grants and a new official one with our current tax base.

  • I have been saying this for years.
    1. Protect the poor
    2. Support education and health
    3. Incarcerate one public servant every day for corruption. When they’re all in prison, start with the stupid.
    It’s not rocket science.

    • Hear hear! What is rocket science is what you do with the stupid! As Einstein said,” Only two things are infinite, the universe and man’s stupidity, and I’m not sure about the former.”

  • I believe that child grant payments should be phased out and a basic income grant phased in. Otherwise the State is merely subsidizing unconstrained population growth leading to a vicious circle of higher unemployment. But the ANC does not get this.

    • All other grants should replaced by BIG except the OAP which would be reduced by the amount received as the BIG. The wealthier people would repay it plus some in income tax.

  • The heading is misleading “Rethink Capitalism”…it should read Rethink Wealth Tax, Rethink Big-Fat Profits, Rethink Executive Bonuses, Just Rethink and Give More to the Poor.

  • Start putting the corrupt in prison for a very long time and Joe Public will support this idea. Start with the main culprit…. Until then, I am still in support of a tax boycott..

  • The concept of a BIG is sound, ethical & responsible…but applying ‘universally’ as some suggest is problematic. Surely SARS records (notwithstanding questions of its veracity) would indicate who are not in need of a basic income? Why would one give someone who does not need/require it a grant ?

  • A few of the comments are reminiscent of USA Republican derogatory comments regarding a “nanny state” ! Yet these same apologists would not dare describe the UK or most European countries with sound social welfare systems, with that same contempt. Some people should mind their Ps and Qs methinks !

    • Oh, come on! Most European countries are obliged to accept refugees from Africa and Asia and then have to house and give them grants, much higher than my worked for State Pension. Can you imagine what would happen (is already happening?) if SA introduced such a system? All Africa would come here!

  • Policy is one issue, implementation another.

    Today on radio about grants people were saying how officials keep R50 of the R350.

    All grants should ONLY be paid into bank accounts. No exceptions. Much simpler and much easier to audit for fraud in agency and from recipient.

  • Poverty in South Africa is a consequence of a combination of apartheid followed by many years of incompetent economic management, especially since 2009. Instead of the current B-BBEE system designed to create a small class of super-rich connected individuals, if we had had a means based economic empowerment system designed to uplift the poor, it would have created a substantial middle class, expanding our tax base exponentially. Their spending would create increased aggregate demand, resulting in more investment and jobs. A virtuous upward cycle. This creates the wealth effect that enables redistribution back into effective education and quality healthcare. Instead, we are focusing on the symptom and not fixing the cause. To further exacerbate the issue, the proposed expropriation without compensation legislation creates uncertainty which destroys investment, in turn increasing unemployment and poverty. Our tax rates are already high relative to benefits received, so increases in taxation further reduce investment and increase poverty. Whether we like it or not, we are part of a global system and must compete to survive. We are not very competitive, and many policy initiatives render us less competitive. I’m all for assisting the poorest, but that is a plaster on a septic wound. We need to address the cause.

    • And the cause is endemic criminality! This is a country of huge mineral and geographical wealth. Prioritise the corruption Court cases, lock up the perpetrators (using their free labour to mend all the potholes) and SA would return to a viable world class tourist and industrial destination.

  • Proper care of the poor should be a necessity for the state, and in many countries it is. However, the prerequisite is a working economy. Which we do not have. Grants in SA take the form of patronage, an exchange for the vote, or at least NOT voting for another party.

    • A BIG is not the answer, no matter how appealing it is to our sense of social responsibility. Its no different to giving a traffic light beggar money. It fills the immediate hole, but is not a solution to unemployment. Its an economic problem that needs to be solved with a viable economic plan

  • Thule says rethink”capitalism”but capitalism is nothing to do with social transfers.In fact Capitalism is the system that produces the wealth that can be taxed to enable the government to make such tranfers.

  • So who’s going to pay for this pie in the sky, whilst 80% of the population sit on their hands at home, having more kids it increase their grant???

  • Money for nothing…Australia some years back had the same debate. If you give someone enough to live, why would he/she/it work? One blast from ths past is to get massive national projects going based on using labour and then pay them salaries. Capitalism is the only workable economic model.

  • BS , all socialist rubbish
    Tax those who make money and employ workers .
    The more you make , the more you must pay ?
    Why ?
    because Matthew was a tax collector ?
    Getting punished for making $$ ?
    so much for equality !

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