Less than one in three South Africans who need social grants get it, yet this week’s Cabinet lekgotla officially jettisoned a basic income grant (BIG) in favour of an expanded public works programme.
The lekgotla, a crucial pre-election assessment of delivery, revealed that six million South Africans now receive child support, disability and old age grants, though about 20-million people are officially poor and in need of state aid.
“We discussed BIG some time ago and we have said our approach should evolve through a compre- hensive social system that includes old age pensions, disability grants and a free public health system.
“If you give everybody a R100 a month it will not make a difference. The notion that one single inter- vention would help is wrong. To introduce a system which indiscriminately gives R100 to a millionaire and a pensioner does not work,” said President Thabo Mbeki this week. Income grant proponents argue that those who are not indigent would pay the money back by way of tax.
Last year, the ruling African National Congress officially declared itself a social democratic party, making its reticence about adult social welfare an aberration. Officially, it is allied to the network of progressive governments that includes the major European social democracies, as well as Brazil.
How do this week’s lekgotla decisions measure up when viewed in terms of social democratic principles? “There are lots of good things, especially on social grants. But it’s still worrying that a small percentage of the poor are covered,” says Asgar Adelzadeh, a senior policy adviser to the United Nations Development Programme.
Instead, the government is looking to a Marshall Plan-type network of public works to absorb the unemployed — and one likely to exceed that agreed to at June’s Growth and Development Summit. Measured by Census 2001, joblessness is at 41,6%.
The government will also continue to provide food aid to 244 000 targeted households, as it has done since February.
The public works focus is a sea change as job creation has previously been seen as a function of the market. It was welcomed by the Congress of South African Trade Unions, which did not publicly decry the kiss of death for BIG this week.
“This programme features at the top of government’s agenda because it is critical for the inclusion of a great number of South Africans —many of whom have little possibility for immediate absorption into the formal economy,” says a lekgotla statement.
“A priority for a social democracy is job creation,” says Adelzadeh. “Employment creation should be a central issue when Cabinet looks at the macro-economy,” he says, adding that “the central issue of employment is still left out in the perception of the macro-economy. Job creation is still happening on a project basis, not through inspecting the structure of the economy.”
Government believes that no macroeconomic or structural changes are necessary to stimulate job creation. Instead it proposed a package of microeconomic measures. Chief among these is the need to quickly boost the level of skilled people to supply the new economic growth areas. These include mineral beneficiation and high-value manufacturing sectors for export, such as the motor vehicle assembly industry and the clothing and textile sector, which has been boosted by the Africa Growth and Opportunity Act.
The economy is choking because of a shortage of scientists, researchers, managers, professionals (in finance, information technology and engineering, among others) and artisans.
Whereas last year’s lekgotla’s major economic focus was on black empowerment, this week’s was on stimulating the economy through transport investment. The government will fund Transnet to expand the rail network, and the concessioning of the Durban container terminal goes ahead as does the speeding-up of procedures at “high-traffic border posts”.
Assessing almost a decade of democracy, the government said it had met the “immediate objectives set out in the Reconstruction and Development Programme” with regard to its social programme of providing water, electricity and housing.
But with half the population unemployed and the same half living below the breadline, the democracy needs more social welfare.