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Civil society calls for reinstatement of Social Relief of Distress grant and unconditional Basic Income Grant

About 20 activists affiliated to the #PayTheGrants campaign picket outside Sassa in Bellville, Cape Town. (Photo: Liezl Human)

The #PayTheGrants Campaign has called for the government to reinstate the Covid Social Relief of Distress (SRD) grant, to increase it from R350 to R585, and to fully implement an unconditional Basic Income Guarantee.

“This is not a favour, this is not a privilege from the state – but it is the people’s right,” said General Moyo during a virtual mass assembly on Sunday morning, 11 July, where the #PayTheGrants Campaign called for the government to reinstate the Social Relief of Distress (SRD) grant and fully implement a Basic Income Grant (BIG).

“I’m coming to you live from an informal settlement called Makause in the east of Johannesburg,” said Moyo, “which is one of the settlements that is highly dense, populated with plus-minus 20,000 people, and has a 45 to 50% unemployed community.” He added that this is a picture that can be seen in many townships across South Africa.

The South African Social Security Agency SRD grant was a temporary measure put in place in May 2020 to alleviate hunger when Covid-19 regulations affected the economy and led to job losses.

Unemployed citizens and refugees who were over 18, who had no other form of income and received no social grants or UIF, were eligible to collect R350 once a month.

However, the government discontinued the SRD grant at the end of April, saying it could no longer afford it, devastating the six million people who relied on the grant.

Now the #PayTheGrants Campaign is calling for the National Coronavirus Command Council to command President Cyril Ramaphosa to immediately reinstate the SRD grant until it is turned into a Basic Income Guarantee for those aged 18-59 with little or no income, including unemployed caregivers and those receiving the child support grant.

Additionally, in the virtual assembly, the campaign demanded that the SRD grant be increased from R350 to R585 per person per month – to meet the food poverty line reported by Stats SA in 2020.

A long time coming

Civil society organisations have been calling for the government to implement a BIG since as early as 2002. And since the beginning of 2021 civil society has called for the government to extend the SRD grant until it is replaced by a BIG.

In July 2020 Social Development Minister Lindiwe Zulu announced that the government would consider a BIG once the SRD grant came to an end, but no BIG has yet been introduced.

Nomzamo Zondo, executive director of the Socio-Economic Rights Unit and the facilitator of the assembly, said the BIG had been an urgent need since the dawn of democracy. 

“Unfortunately, despite our growing inequality, despite spiralling unemployment and poverty in our country, our government has not committed to the Basic Income Guarantee.”

Duma Gqubule, a financial journalist, analyst and researcher, discussed “what the Communist Party calls ‘the crisis before the crisis’ ”.

Gqubule highlighted how, “We had a lost decade between 2009 and 2019 during which the GDP per capita did not grow”, and that between 2015 and 2019 our GDP per capita declined.

“Between December 2008 and March 2020 unemployment increased from 4.9 million people to 10.8 million people,” he said, calling South Africa’s current situation “the crisis after the crisis”.

Along with, “a botched response to the pandemic”, Gqubule noted that in 2020 our GDP declined by 7.2% and that unemployment increased by 1.4 million people. 

“We are in the worst post-apartheid economic crisis,” he said.

Why BIG is necessary

Stats SA’s Quarterly Labour Force Survey reported on 1 June that, based on results from the first three months of 2021, the official unemployment rate was 32.6%, and using the expanded definition of unemployment was even higher at 43.2%.

“Which is the highest that has ever been since the labour force survey started in 2008,” said Dr Wanga Zembe-Mkabile, a specialist scientist at the SA Medical Research Council.

Zembe-Mkabile elaborated how high levels of unemployment have had devastating effects on individuals, specifically with regard to hunger and feelings of hopelessness.

Address hunger

According to the National Income Dynamics Study – Coronavirus Rapid Mobile Survey (Nids-Cram) Wave 5 results, released on 8 July, it is estimated that in April and May more than 10 million adults and three million children lived in households that had been affected by hunger in the previous seven days.

Additionally, approximately 400,000 children and 1.8 million household members reported being hungry every day or almost every day.

Zembe-Mkabile said that, while the Covid-19 SRD grant was imperfect and “very inadequate”, research on food insecurity and hunger during the pandemic indicated that when the SRD grant, caregivers’ allowance and social grant top-ups were in place, there was a slight diminution of hunger and food insecurity.

“It’s slight, because certainly the Covid-19 SRD grant was so small,” said Zembe-Mkabile, adding that this is why the amount needs to be linked to an objective measure of need, like the food poverty line of R585.

The Nids-Cram Wave 5 report stated, “The reduced availability of money from grants and the tight economic situation are reasons why levels of hunger are likely to remain stubbornly high or perhaps even to increase, and stricter lockdown regulations may again further reduce employment and income from informal economic activities.” 

In support of this, Zembe-Mkabile said, “In the research community, there’s a full expectation that if this [no SRD grant] continues, the levels of food insecurity and hunger that we’re seeing will only get worse, much worse than they already are.”

Psychological impact

Nids-Cram reported that, “40% of adults living with children in food insecure households showed signs of depressed mood in April 2021”.

Looking at a study by the Black Sash, Zembe-Mkabile said, “Findings show that for unemployed people, especially those who experienced unemployment for long periods… the SRD grant represented hope, it made them feel seen and recognised by the state.

“When there is no provision for an entire segment of the population, such as the unemployed… they feel as though they’re invisible to the state.

“They don’t feel recognised by the state. There’s a lot of hopelessness. So, the discontinuation of the grant, no matter how small and inadequate it was, means a return to that hopelessness and invisibility.”

Princess Majola, coordinator of COWG and #PayTheGrants and secretary of the United Front, told the assembly, “Like the famous closing remarks of our president in the so-called family meetings, ‘my fellow South Africans, it’s all in your hands now.’

“The working class has been left after the termination of the SRD grant to look after themselves, to support themselves… without the assistance of the state.”

Zwelinzima Vavi, general secretary of the SA Federation of Trade Unions, said, “Even what we see today in KwaZulu-Natal and in Gauteng is actually not necessarily a narrow support for somebody who has found himself on the other side of the law. 

“But it is an expression of anger, in particular among the working class and the poor, and they are finding any way to express that anger, including burning trucks and closing highways.”

Women’s emancipation and gender-based violence

Nids-Cram Wave 5 reported that while the level of unemployment of SA men has recovered to pre-Covid levels, as of March 2021 the level of women in employment was 8% lower than it was pre-Covid.

Additionally, Nids-Cram reported, “Women have not benefited from either UIF-Ters or the Covid-19 SRD at the same rates as men, despite being worse affected in terms of job loss (women make up only about 35%-39% of the beneficiaries of these two grants).”

Francina Nkosi, provincial coordinator of Women Affected by Mining United in Action, told the assembly, “When we look at our Constitution, it starts by saying, the community has the right to health, water, and social security.

“But when we look at how women are affected, in the rural areas and in communities where there’s mining, there’s a lot of poverty  and social challenges that are happening there due to lack of resources.

“We have the home-based carers who are doing the work without any support or money. They are there doing unpaid labour each and every day, to assist the elderly, to assist those who are in need. And this is a daily burden.

“We have women who are still going to the rivers to access water and go to fetch firewood. And during Covid, it was a serious, serious challenge.”

Majola said that women have had to fight to find the means to feed their family, and even for basic necessities like menstrual products.

Along with this, women have faced gender-based violence.

Majola explained how during the pandemic, “The working class had to face retrenchment and high rates of unemployment, leading to no source of income. With no income, women were subjected to gender-based violence from frustrated partners.

“Now that there was no source of income they would go back home and all the anger and all the frustration they had within them… they unleashed on to the innocent woman who now had to carry the burden of something that was not created by them.”

How BIG can be financed

The reason the SRD grant was stopped and why no BIG has been implemented, is because the government said it could no longer afford it.

Gqubule has 11 suggestions of how to finance a stimulus for South Africa:

1. Monetary financing

“It’s an umbrella term that encompasses proposals such as QE for the people, helicopter money, sovereign money – it’s basically money creation, at no cost by the Central Bank for public purpose,” said Gqubule.

2. Central bank lending

3. Quantitative easing

4. Excess foreign exchange reserves

“The government will not tell you that we have excess foreign exchange reserves of R800-billion. The government will not remind you that we have cash in the government of R292-billion. We can release some of that into the economy.”

5. UIF surpluses

“It also has huge surpluses, which are growing over the next three years to about R127-billion,” said Gqubule.

6. PIC lending

“I also believe there’s excess funding in the Public Investment Corporation,” said Gbubule.

7. A Government Employees Pension Fund payment holiday

8. Restructuring SA Inc’s balance sheet

“We can reduce the funding in the PIC by about 50%,” said Gqubule, “and we can release about R1-trillion into the economy that involves the government writing off about R700-billion of debt, by the government to the PIC. The PIC code also lends to the government.”

9. Increased borrowing

10. Higher taxes

11. Prescribed assets

The campaign organisers stated, “We have marched, protested, picketed, and submitted letters, but even today, we are being pushed back to adjusted Level 4 restrictions with no measures in place to assist on the ticking time bomb that poverty will bring to the masses.”

President Cyril Ramaphosa didn’t mention the SRD grant in his address to the nation on Sunday night, but he did say: “Following the move to Alert Level 4, the Unemployment Insurance Fund embarked on negotiations with social partners to address the difficulties of employees who lost income under these restrictions.” DM

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  • @Gqubule:
    Your list of possible funding sources is completely useless.

    1. unspecified…details please
    2. debts do need to be repaid…I know its inconvenient but true.
    3. QE can be extremely dangerous for under developed or ailing economies, basically you want to print money…bad idea, especially in our flourishing corruption climate. Why don’t you read how that went south fast in the past for other countries.
    4 to 7: so now stealing money from the few social systems we still have is going to solve our problems? madness…with zero vision. The UIF is a valid fund paid for by working people and used for people that lost their jobs. PIC is for pensioners who have paid in their whole lives. Both primarily already mostly benefit the poor in this country and you want to take that from them.
    8. Writing off debt comes at a high cost for our economy and future investments, jobs etc…
    9. News flash: we are on a fiscal cliff…no more space to borrow. You can thank the ANC for that one.
    10. yeah, tax the middle class (of all races) into poverty, the ones paying most of the taxes already, giving the most jobs and opportunities. Again complete madness.
    11. what on earth do you mean?

    Terrible collection of suggestions with zero arguments.
    There is no question we need to act on our inequality, but at least some forethought for the long and mid term for the whole country?