Excuse me while I date myself. My children were born in pre-Thatcher Welfare State Britain. Everything was free – from the sparkling hospital to post-natal home visits, milk and orange juice for the kiddiwinks and calcium for me, as well as their education. I collected a family allowance from the post office every week for the children’s maintenance.
According to current ideology my family and I should have sunk into sloth, victims of dependence culture. We should have had dozens of children, and spent the allowance on fags and booze.
Instead my partner Colin worked all the hours that God made ? because that is the kind of bloke he is ? I went back to work when child-care allowed; and our daughters passed matric, got degrees and then jobs. The significance will become clear.
An unstoppable campaign for a Basic Income Grant (Big) is developing in South Africa, as a means to address intractable poverty and destitution. A Big is a grant given to all citizens as a right, without means test. Entitlement does not have to be proved. It can be clawed back with tax from people with income, remaining with the very poor only.
The government is now considering the report of a high level, multi-ministry committee of inquiry into a comprehensive social security system. It received a mass of evidence throughout last year, much of which focused on the possibility of a Big. Meanwhile, a Big coalition was formed, led by the Congress of South African Trade Unions, individual labour unions, the South African Council of Churches, the Catholic Bishops Conference, heavyweight NGOs like the Black Sash and a wide range of development NGOs.
We don?t yet know what the commission reported; but the delay in publishing it is an encouraging sign. Minister of Welfare and Population Development Zola Skweyiya is known to be shocked by the failure of the current welfare system to address widespread social disintegration as a result of poverty.
Funnily enough, the cost of a Big is not a critical problem. Evidence on financing by a number of research organisations, illustrating different scenarios, is already in the public domain. It shows the present taxation system, with some tweaking, can absorb the annual cost of about
R24-billion required to finance a R100 monthly Big. There is also a range of proposals for benign alternative taxes.
My sense is that objections about cost are really a cover for a range of political or philosophical objections. One is around ?creating dependency?. This is a cruel joke in South Africa where nearly half the population is not only unemployed but without prospect of employment. They are already profoundly dependent ? they live by begging, borrowing or stealing.
The fact is that poverty is now a tax on the working poor, who have to remit part of their pittance to others with nothing. Meanwhile, we who pay taxes already receive, via tax allowance, a subsidy by the Treasury that amounts to a Big.
Welfare payment that depends on means testing is nonsense in South Africa. It was developed in Europe where people normally at work needed to be tided over when temporarily out of work. But regular employment is not the norm here. How would we assess entitlement by a woman who earns R10 a day selling chips outside the station?
The Big needs virtually no bureaucracy: to collect it all you need is an ID or a bank account. Only 23% of people now entitled to welfare receive it ? largely because of complicated proofs needed to show entitlement. And if by some miracle all were to claim, we would reach only 36% of people now living in extreme poverty.
Another advantage is that a Big actually reduces dependence and enables work. Because it is regular it helps people to seek work, to take risks in upskilling themselves, to become responsible planners of their lives. It also creates livelihoods in areas that are now actually cashless. It would have a multiplier effect in local economies, where people could activate dormant or potential skills because there is a local demand.
A Big would have a developmental and growth impact. And the cost to the Treasury would fall over time as tax revenues increase. The only serious alternative anti-poverty strategy ? employment of all the poor on public works programmes ? would be much more expensive and require huge management capacity.
The danger is the government will opt for an expanded system of means tested benefits, which seems cheaper. In fact it would be more expensive: means testing is a grossly inefficient way of addressing poverty. It would place a burden on the health service as malnourished children lose capacity, and ?cured? people leave hospital without the means to sustain health.
We are wasting the social budget, because people are too poor to benefit. Not to mention the minute-by-minute stress, hunger, anger, misery and sheer hopelessness endured by nearly half of our population.