Organised labour has called for a Basic Income Grant (BIG) to be introduced permanently in 2022.
In a statement this week, the Congress of South African Trade Unions (Cosatu), National Congress of Trade Unions (Nactu) and the Federation of Unions of South Africa (Fedusa), welcomed the reintroduction of the R350 Covid-19 relief grant, and said that it should serve as a first step towards a BIG.
‘It must now be made permanent and be used as a foundation for a basic income grant.
It must be extended beyond March 2022 and adjusted in line with the food poverty level,’ the unions said.
‘The government needs to provide for its extension and enhancement in the October medium-term budget policy statement.’
The renewed push for a BIG comes after the Department of Social Development published a green paper on comprehensive social security reform, which includes a proposal to introduce a BIG.
Many have criticised the Covid-19 relief grant, saying that R350 is not enough to make a real difference in the lives of the poor.
The green paper argues that a BIG would:
- Reduce hunger – The grant value would have to be around the Food Poverty Line (FPL) in order to make a real difference. As of the 2020 adjustments, the FPL is R585 a month.
- Reduce poverty – This would mean the grant value must be pitched around the lower-bound poverty line … of R840 a month.
- Improve people’s standard of living – This would be the most expensive to achieve, since it would need to start at least around the upper-bound poverty line … of R1 268 a month.
Said the department: ‘Studies done on a decent standard of living suggest income of around R7 500 per person, per month. This is an aspirational value that government should strive to achieve through a mix of transfers, labour and economic policies.’
Calculations on introducing universal income support at the level of the food poverty line (R585) shows that the cost will be an estimatedR200 billion and would mean a 10-percentage point increase on income taxes.
‘At face value, these amounts appear to be astronomically high and even impossible,’ the department said.
‘For the majority of the population, depending on the level of the transfer, it is likely that the benefit received will be larger than their increase in taxes.
‘The wealthiest deciles of the population will only see a slight reduction in income on average, and the impact of this may be reduced if phased in over a period of time.’
[Image: Steve Buissinne from Pixabay]