This past week Business Unity South Africa (Busa) and Business Leadership South Africa (BLSA) launched an attack on the proposed basic income grant (BIG), taking the position that a BIG is unaffordable.
Busa and the BLSA, in a research paper they commissioned, state that raising taxes is the only “theoretically viable option” for South Africa to fund a BIG. Understandably, raising taxes gets conservatives up in arms.
But contrary to the research commissioned by Busa and the BLSA, and undertaken by market research and intelligence firm Intellidex, there are in fact eight financing options for a BIG, according to research undertaken by the Social Policy Initiative (SPI).
The materialisation of a BIG – or absence thereof – largely rests on political will.
In a press statement, Busa’s CEO, Cas Coovadia, cautions that “the BIG is not an allocation of funds for a few years, but rather a permanent decision that must be carefully considered as, realistically, it cannot be undone once implemented”.
Coovadia attacks the BIG proposal, saying that “any choice here on any funding front will simply not be available in future for other social wage policy choices, such as National Health Insurance and comprehensive social security reform”.
On the contrary, research by the SPI supports the position that a BIG could in fact supplement other means of social provisioning through universal public services – free education and healthcare, and subsidised public electricity, transport and mass housing.
Some people like to think that the debate around whether South Africans should receive a BIG or not is an ideological one.
Ideology, whether you’re aware of it happening or not, is (first) formed in the home and is either entrenched or overturned as you mature. That includes ideas that you believe about the role of the state – whether it is to play a minimalist role (the neoliberal view) or a full-on interventionist “nanny” role (far-leftist view), or somewhere in between. These are formed in your mind from the time you’re of school-going age.
If you’re middle class and went to university, you will remember ideologies being debated inside and outside the lecture halls. If you are part of the majority of this country, life happens, and arguments are seldom about words.
The far left in this country will have you believe that the call for a BIG is a radical one, but, on closer inspection, this really isn’t the case.
Not everyone can work in the formal economy and not every business owner has a formal education or parents to provide them with start-up backing, or can access credit. And this describes the majority of black people born in South Africa. who are hamstrung by the legacy of apartheid.
A BIG is no silver bullet to South Africa’s economic problems of poverty and inequality, but it would be a major step towards transforming the economy and empowering human beings.
A BIG would empower people by destigmatising grant recipients through scrapping the means tests for the old age pension, the disability grant and the child support grant.
A basic universal income grant could also empower people by, for example, providing start-up capital for an ambitious woman baking and selling vetkoek. And for someone else who is less driven, a BIG would enable them to buy the vetkoek from her (as well as other more nutritious food), thereby enabling the baker to profit and earn tomorrow’s ingredients, and the less ambitious person to survive.
A BIG is not disincentivising people from working, as some conservatives would have you believe. A BIG does not turn the state into a “nanny” answering to your every need and whim.
The reason is this: the grant money will never be enough for everyone to lead a decent lifestyle. People who depend only on grant money will always be poor, but they will have enough to survive. Thus, the BIG would provide a dignity floor for all people in South Africa. People who have ambitions could save their grant money and put it into skills development, or use it as venture capital.
Whatever people spend their money on is none of our business. But it is our business as South Africans to care about the people who are starving and living below the poverty line. It is our business to care about the underdevelopment of children’s brains due to stunted growth as a result of malnutrition, children who will never be able to complete school because they didn’t have access to food.
As South Africans, we can disagree on “politics” and on our views about what the duty of the state is and is not, but we should never be debating human dignity and the constitutional right of human beings to access food to be able to get by.
It is not a radical idea that human beings are human beings. DM
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It is funny how only far left and activists seem to think that we can afford a income grant. Everyone else is sure it would be the final nail in our coffin.
“The materialisation of a BIG – or absence thereof – largely rests on political will.” is simply a wrong statement, its maybe wishful thinking but not the reality.
Dailymaverick published a much more truthful article: “Funding a basic income grant will not mean a ‘slight increase’ in taxes – it will be close to crippling”.
No, its vote buying by an organisation that has destroyed the economy and ruined the lives and futures of many. I also object to the fact that I should be paying even more tax to fund the lives of people that put this party into power and left it there for decades. I object to the fact that individuals can have as many children as they wish and I, the taxpayer, has to dole out for free everything. Rather support Gift of the Givers that are making a real difference.
Well put. However a BIG needs to be accompanied by removing all obstacles to the private sector’s ability to operate. Social engineering policy is a core problem.
BIG quite possibly makes a lot of sense, and has been promoted by mainstream economists for quite a while now. The question is: How do you fund it ? There is pretty much zero margin left for further taxation.
Again, a great many words about poverty this and poverty that, and nothing at all said about the population explosion in only one of South Africa’s racial groups. If I am responsible with my family planning, why should I be forced to pay to feed those who can’t be bothered with such inconvenient practicalities?
“A BIG is not disincentivising people from working”
Yes it does. It always has and always will. And the new Marxist-driven culture of victimhood is driving this nonsense to astonishing new depths of unabashed lunatic tyranny.
“You cannot bring prosperity by discouraging thrift.
You cannot help small men by tearing down big men.
You cannot strengthen the weak by weakening the strong.
You cannot lift the wage earner by pulling down the wage payer.
You cannot help the poor man by destroying the rich.
You cannot keep out of trouble by spending more than your income.
You cannot further the brotherhood of men by inciting class hatred.
You cannot establish security on borrowed money.
You cannot build character and courage by taking away man’s initiative and independence.
You cannot help men permanently by doing for them what they could and should do for themselves.”
~ Rev. William J. H. Boetcker
“But it is our business as South Africans to care about the people who are starving and living below the poverty line.” They are in this situation not because of anything other than rampant, uncaring, and inconsiderate overpopulation. To care about people who are starving is surely best done by preventing the root cause in the first place. This whole debate is about what plaster to patch onto an amputated limb. More time, effort, and debate should surely rather go into the much more difficult issue of population control in the face of limited resources.
A BIG will not eliminate poverty or inequality but it is a good start because it reduces the damage of malnutrition. An experiment in Namibia showed that it stimulated economic activity and improved education. When parents can pay the R10 a month for schooling they feel involved and demand results, so much better than apathy.
It is a cost to the tax payer but initially it need not be large. In my opinion the benefits to the nation will exceed the cost.
hear hear
“Research by SPI” says its possible. Doesn’t discuss the “research by SPI”. Yoh. I don’t know what made you skip out all this CRITICAL information, but if you want to change people’s opinions on this, maybe start here. Or do you already know that people are being rung out with rising costs and, while BIG may be possible, it will be unpalatable to the majority of tax payers?
The author makes the mistake that assuming everyone who is hesitant about the BIG doesn’t want to help others. Some of us just don’t want to join others in poverty because we have been taxed into oblivion by the government so they can offer BIG and get votes.
Before we start, let’s get rid of two errors in the article. Firstly, “Understandably, raising taxes gets conservatives up in arms.” Try saying “tax-payers” instead of “conservatives”, because those of us who pay the taxes with which the State pays grants, are not all conservatives.
Secondly, “… hamstrung by the legacy of apartheid …” is now a tired old argument. The ANC has ruled for 28 years, and the median age in SA is 28. That means that more than 50% of the population was “born free”. And more than 60% never experienced Apartheid education. Time to move on.
Why not explore Roosevelt’s new deal public works and agricultural reform plans? These initiatives, in conjunction with the trimming of the civil service bill by 15%, gave substantial lift to the US post-depression turnaround. NOT income grants, but honest hard work plus cutting out bloated civil servant costs. THAT’S what will give poor people dignity, not dumbed down grants.
It is disheartening to see that there are still people who don’t believe that the fact of apartheid is still having having a detrimental effect on the majority of South Africa’s population. e.g.,I would say that a great deal of the learning population of South Africe are still experiencing apartheid education. I can’t understand how anyone can say that the education received by poor children at township schools is adequate. It is not, and, for so long as significant proportion of the government in power places the feathering of their own personal nests above the needs of children who should be receiving equal education, township schooling will never be adequate. I think the concept of government, as we know it, is no longer working and needs to change.
You are contradicting yourself much. Who other than the ANC would be responsible for the state of our education after 28 years? For as long as you keep staring at apartheid, you will never see the solutions.
Other commenters seem to be unaware that having a large population of people in South Africa who are struggling to lead dignified lives is actually quite expensive for those of us who are more privileged. It fuels neofascist movements like EFF and contributes to moments like the near-insurrection of July 2021. It fuels crime. It means that many people are unable to participate meaningfully as citizens, because being an engaged citizen in fact requires access to information, communications, and the ability to travel and engage with institutions. Most middle-class people get basic income support from family at one time or another, in one form or another, and we regard that as perfectly acceptable. But the moment someone proposes that that support should come from the state, all the familiar kneejerk rants about socialism and leftwingers pop up. Well, guess what: ‘socialism’, and social democracy, at its best, is just about creating a functioning society that people actually want to live in, rather than a society that looks more like a cagefight.
Noone is saying we should not support or have empathy for the poor. SA is actually one of the leading countries when it comes to social spending. But what we do get to do is to complain about is how that money is spent. Most of the middle class I know including myself goes well beyond just paying their grossly inflated tax for fat cats in the ANC. That the current sudden push for NHI, BIG, social pension etc is nothing more than a desperate attempt to increase voters to keep in power to carry on looting is basically a fact not an opinion at this point, especially after the Zondo commission and its findings on cadre deployment. With that in mind, how do you suggest we solve the issue of poverty without supporting an organization that has more in common with the mafia than anything else? To begin with, at the very very very least some accountability for corruption would be the minimum prerequisite to help alleviate poverty. The ruling parties reluctance shows its true intent and it is this that most people resist, not some lack of empathy that many commentators seem to suggest. And rightfully so. How else do we get rid of the ANC if the poor keep on believing the lies and the rest of us pay the price while criminals are becoming rich beyond any moral or historical justification?
The road to hell is paved with good intentions. One such would be a BIG.