There is one thing the ANC has been consistent about over the years: their commitment to ensuring that millions of South Africans stay reliant on the government for an income.
A proposal supporting the introduction of a Basic Income Grant (BIG) was reportedly leaked from the ANC’s lekgotla in late January, with the party (at least on paper) ready to expand South Africa’s already extensive suite of social assistance programmes.
True economic empowerment
Social grants are a lifeline for millions of South Africans unable to find work and for those truly disadvantaged. This is a fact. However, the ANC’s promotion of social grants has become fiscally unsustainable, but this did not deter the party from making a bold statement at last year’s election: “We support a BIG that benefits all individuals without work-seeking conditions”. It was subsequently scored an “A” by the Institute for Economic Justice, which further claimed that a Universal Basic Income Grant “would position SA as a leader in charting a new path of inclusive growth”.
According to data from the Centre for Risk Analysis, there are only 90 people employed for every 100 social grant recipients. 23 years ago there were 313 employed for 100 recipients.
Heading in the wrong direction.
The only form of economic justice that can help South Africans is employment. IRR polling has shown that need: 83% of South Africans want a government that is focused on creating jobs, rather than one that focuses on social grants. Creating jobs is the most sustainable way to defeat poverty and to create the environment for investment that will boost growth.
My colleague Anlu Keeve detailed the economic implications of higher social grants on South Africa’s tax base, stretched thin by increased dependence and stubbornly high unemployment.
Cyril doesn’t listen
The President continued the well-worn path of highlighting small successes and presenting big ambitious plans in the latest State of the Nation Address, but there are no major changes (yet) in government policy vis-à-vis social grants or public employment programmes. In fact, Mr Ramaphosa claimed that public employment programmes “create meaningful work”.
That is a lie.
The government defines its own flagship Expanded Public Works Programme (EPWP) as “temporary work for the unemployed to carry out socially useful activities” – which begs the question: How is cleaning streets, parks and other menial work “socially useful” for the unemployed, young, and ageing beneficiaries, some of whom know no other form of work?
Does it teach skills? No. Does it provide a pathway out of poverty? No. Does it reduce unemployment? No. Does it reduce inequality? No.
The President’s plan to “institutionalise” these programmes will continue to drain all South Africans of their hard-earned money to support a temporary work programme that provides no visible benefit to the beneficiaries, their families, their communities and the economy.
Since its inception in 2004, the programme has reportedly created 14 million opportunities – and cost South Africans an estimated R41 billion in the last five years. But It has only created roughly five million work opportunities.
What about the “evidence for all to see”, that the President claimed to have in the celebration of the 20th anniversary of the EPWP in 2024?
Not so much. EPWP expenditure mainly goes to provincial and municipal governments for routine maintenance. Roads, pipes, sewers and other infrastructure are far past their breaking points. Municipal workforces are lacking the necessary technical skills to address these challenges.
The wasted potential
The President’s 2024 SONA speech summed up the need for jobs:
“Having a job does not only provide an income – it is fundamental to people’s sense of self-worth, dignity, hope, purpose and inclusion.”
However, as we have seen with the Expropriation Act and the lip service on title deeds, does the President really believe this, or is he telling South Africans what they want to hear?
Pro-poverty policies like the excessively high national minimum wage, employment equity and EWC continue to lock the unemployed out of the dignity of a job.
We cannot afford to be selective about who gets a job. South Africans deserve the opportunity to prove themselves, to defeat state dependency and embrace the freedom that jobs provide.
Look at our burgeoning informal economy, which is reportedly worth an estimated R1 trillion, as an example of the power of the market to provide “dignity, purpose and inclusion”. Entrepreneurs across the country achieved it with little to no government regulation, driven by the demand of the people for more affordable goods and services. It is time to harness this success.
The government can get out of this mess. By removing the barriers to employment, South Africa’s BIG mess could become a big pro-growth success: a healthy economy, with millions of South Africans having the opportunity to access jobs and provide a safe and healthy environment for their families.
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