Basic Income Grant
International treaty, our national jobs crisis and our duty oblige the government to act on this, says the Black Sash
Black Sash advocates for a R1,227 monthly poverty lifeline
● The Black Sash has campaigned for years for the implementation of income support for those aged 18 to 59 with no or little income. The Covid-19 social relief of distress (SRD) and the caregiver grants are critical steps towards the implementation of universal basic income support, where all who live in SA receive an income from the government that is high enough to ensure a dignified life.
Income support is feasible and affordable and will contribute to economic growth. It is not a handout but a share of the collective wealth of SA. Income support will also ensure that many households have improved health and education, which will have a long-term impact on poverty reduction. Social development minister Lindiwe Zulu’s recent support for a basic income is encouraging.
The expansion of social grants is one of the greatest post-1994 redistributive achievements in SA. Social grants provide financial support to over 18-million of the most vulnerable: the elderly, children and people with disabilities.
But the social security system has some serious coverage gaps. Although section 27 of our constitution makes provision for social security, “including appropriate social assistance if they are unable to support themselves”, SA still does not have a social assistance or income support programme for adults aged 18 to 59 with no or little income.
The government in 2015 also ratified the International Covenant on Economic, Social & Cultural Rights, a UN treaty that protects a wide range of human rights. By October this year, the South African government has an obligation under international law to “ensure that those between the ages of 18 and 59 with little or no income have access to social assistance”. Other key recommendations include “consider the possibility of introducing a universal basic income grant” and “raise the levels of government social assistance benefits to a level that ensures an adequate standard of living for recipients and their families”.
What are we waiting for?
Those who are against a basic income usually advance two arguments: that we can’t afford it, and that if unemployed people receive income support they will stop looking for work.
In fact, a growing body of research from pilot studies globally shows that guaranteeing a minimum income is a key means to enable people to engage in economic activity, including job seeking, and that a basic income is able to reduce both poverty and inequality.
But in August 2020, as the number of Covidinfected people continues to soar and desperate hunger in many parts of SA is widely reported, advising the hungry to look for a job is cruel as well as unrealistic.
The most recent Stats SA Quarterly Labour Force Survey shows that before the pandemic, in the first quarter of 2020, the number of unemployed people increased to about 10 million (42%) based on the expanded definition. Even worse, the percentage of young people (SA’s future) aged between 15 and 34 who were not in employment, education or training increased from 40.7% to 41.7% in this period.
SA has a structural unemployment problem and the truth is that the millions of unemployed people will continue their struggle to find work beyond the pandemic. What horrors will the labour survey of the second quarter of 2020 reveal? Can we afford not to introduce basic income support?
The reasons for SA’s inability to generate jobs over the past two decades are many faceted and widely debated. As President Cyril Ramaphosa has repeatedly stated, the outpouring of solidarity towards those with no resources who are starving has been admirable. However, this cannot substitute for state action backed by the fiscus. We are facing a national crisis.
What has the government done so far? In response to the Covid-19 pandemic, the department of social development and the South African Social Security Agency planned to distribute 250,000 food parcels through the social relief of distress programme. As the extent of the national humanitarian crisis became evident, this number was increased to a million food parcels. Though better than nothing, the programme is inadequate and has been beset by the usual suspects — the government’s lack of capacity, and mismanagement. The food parcel tender and its distribution network are now mired in allegations of corruption.
In April, the government introduced the Covid-19 SRD grant. This grant of R350 per month, for six months ending in October, targets individuals aged 18 to 59 with no income. A caregiver grant valued at R500 monthly for five months was also initiated. Though these new grants are critical steps towards a universal basic income grant, R350 and R500 respectively per month is below the value of the food parcel and is highly insufficient to make a difference to hunger.
These amounts are inadequate to cover food, energy sources and transport, as well as the additional cost of complying with hygiene protocols during the pandemic. The Black Sash, through our wide partner network, has been involved in the effort to assist people to apply for the Covid-19 SRD grant. The digital application platforms continue to be inaccessible for many eligible applicants. Three months in, many have still not received this grant.
The Black Sash recommends a phased-in approach to basic income support. Zulu has identified two age groups most critically in need that should be prioritised: the 18- to 24-year-olds (the child support grant ends when a child turns 18), and those between 50 and 59 years.
Both the Covid-19 SRD and the caregiver grants should be converted into permanent basic income support. We estimate that between 10-million and 15-million people will need this grant. We look forward to the minister presenting an implementation plan with a budget.
Reality check: according to figures calculated by the Pietermaritzburg Economic Justice & Dignity Group, the cost of the monthly basket of staple foods has increased by 6% to R3,413.14 for the average household. The value of the basic income support grant, then, should be increased to at least the upper-bound poverty line, which is currently R1,227 per month.
How do we fund basic income support? Suggestions from economists range from the reprioritisation of government expenditure to raising tax revenues and eliminating illicit financial flows and fiscal drag.
Together with our community partners we have developed over many years a clear-eyed view of the poverty and desperation in SA, even before the pandemic. In this unprecedented global emergency, the Black Sash insists that basic income support for those aged 18 to 59 be introduced now!