Why all South Africans should back a basic income grant

There is growing interest in the concept of a basic income grant in SA, brought to the fore by the devastating effects of Covid-19. Many years after civil society and economic advisers first raised the debate, it is once again a proposal deserving our attention as we face up to the horrendous economic damage brought about by the pandemic, and the desperate plight of the majority of South Africans under the double burden of poverty and inequality.

The Black Sash has launched a report carefully analysing the arguments in favour of such a grant, explaining what it could entail, how it could benefit individuals and the economy as a whole, and what the costs and effects could be. Simultaneously, the organisation launched a petition, supported by a considerable number of other non-profit organisations, addressed to the president and ministers of finance and social development. The research report that accompanies the petition suggests how the necessary funding could be achieved.

The subject is so important that it should not be left only to organisations serving the interests of the poorest sectors of our society. Those interested in the topic should include businesses looking for markets, economists exploring different models, investors and entrepreneurs, and all people who seek to live in a society less fraught by division and strife. The petition will gather strength if it is endorsed by a wide cross-section of the population.

The concept of a universal basic income grant, as it has generally been defined, is one of an equal payment made by the state to every person, or citizen, of a country, from birth to death, regardless of whether that person has an income. This confers the dignity of equal status to everyone, eliminates the need for any means test or other qualification (thus saving the state the expense of maintaining a system to administer such tests), reduces the risk of corruption in the administration process, and allows for an immediate end to absolute abject poverty. It creates the incentive for a rapid injection of expenditure into the economy as people acquire the ability to buy food and other necessities.

Those who already have an income from employment or investments could also use the additional spending power to boost expenditure, while increased tax revenue would accrue to the fiscus. The spurt of energy this could bring to the depressed state of the marketplace would be matched by ...
13 Sep 2020 11AM English South Africa Business News · News

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