/ 9 October 2021

Income grant: Big bang for a few rand

Covid R350 Grant Applicant Veronicah Sehoke Photo Delwyn Verasamy
A woman applies for the special R350 Covid-19 grant. (Delwyn Verasamy/M&G)

The corporate alpha males are once again in full flight claiming “only we alone” can save South Africa from its pandemic-ravaged economy, displaying the uneducated, arrogant plumage of privilege.

Mark Barnes, the failed Post Office corporate cadre deployment experiment, regaled radio listeners from his socially distanced Kommetjie beachfront spread with the notion that “it would take fewer than one hundred top business leaders less than three years to fix our economy — fund them, authorise them, get out of their way.”

It’s an old yarn from a grifter fraternity camouflaging shallow imaginations, dumbed down by transactional MBAs and seeking relevance after authoring the 2008 financial crash. 

Adding insult to 2008’s injuries, the corporate risk analysts were blindsided by a pestilence anticipated by virologists since the 1980s; or by a cursory reading of absurdist philosopher Albert Camus’ 1947 novel The Plague

A universal basic income (UBI) was conceived as a rising tide to lift all boats, after realising that pissing on the poor — known by its euphemism trickle-down economics — would eventually splinter the ground wealth stood on. 

The idea is to hand every 18- to 59-year-old citizen a small regular unconditional cash payment — be they employed, unemployed or idle rich, from Kommetjie’s asset class to Hanover Park’s gangsters. 

This ends the post-apartheid “pencil test” for the poor to prove they are deserving. “Poverty is fundamentally about a lack of cash. It’s not about stupidity,” the economist and Mozambique political analyst Joseph Hanlon says. 

“You can’t pull yourself up by your bootstraps if you have no boots.”

The grant’s simplicity disguises its complex, nuanced and scientifically documented bang for your buck, from vastly increased school attendance, more regular municipal service payments, improved community and mental health, sustainable small and micro businesses and lower crime and gender-based violence rates.

Globally governments responded to the Covid-19 crash with the 2008 corporate socialist default setting of raiding public coffers, refloating private business, inflating stock markets and guaranteeing chief executives bonuses. UBI generics to prevent society collapsing into the pit of hunger, mall looting, truck burning and Big Men squabbling over spoils was an afterthought.

The passive-income-monied classes scoffed at the Covid-19 monthly R350 grant in an inability to discern that “it’s not about the income you are receiving, it’s about the aggregate income that your community is receiving”, according to Neil Coleman, cofounder and senior policy specialist at the Institute For Economic Justice.

Corporate socialism   

Murray Leibbrandt, chair of poverty and inequality research at the University of Cape Town, says half of South Africans — about 30-million people — exist in chronic, persistent poverty. Nearly a fifth, or 12-million people, comprise the “vulnerable” middle class. The financial elite’s demographic is nearly three-quarters white. 

Corporate knights 

Rob “Chief” Hersov, the self-anointed corporate South Africa spokesman (he chairs the institutional investment fund Invest Africa) favours Helen Zille’s autobahn argument that colonialism was “not all bad”. 

Mentored by Rupert Murdoch —  the “tits-and-ass” media mogul who found immense wealth in Big Lies, climate change denialism, anti-vaxxer narratives, xenophobia and eroding liberal democracies  — Hersov’s “alternative facts” belittle his very expensive Michaelhouse private education. (For the record, Chief, the British Empire at the height of its powers imposed sanctions against an uncolonised Japan, unable to compete with a fast industrialising island-state of small-scale farmers, fishermen and master metallurgists). 

Hersov, and men like him with big wonga, are cast as the economic catalysts for the political analyst and academic RW Johnson’s ideas of post-pandemic recovery for more of the same low-employment corporate dominion, greater deregulation and market forces charged with transforming apartheid’s stubborn economic racial legacy. 

The corporate’s doyen dismisses UBI as “unaffordable charity,” while blind to its core function as a canoe’s outrigger, largely useless on its own, but essential to maintain stability and the incalculable value of post-conflict states’ fragile peace dividends.

Opaque fees scooped from the public purse by corporate luminaries, such as US business management firm McKinsey’s R900-million invoice for activities as demanding as switching on the coffee machine without the butler’s assistance, is more than easy money. It curdles money’s velocity — the rate at which money circulates — to sour any sustainable economic recovery. 

University of Johannesburg sociology professor Patrick Bond says a universal grant “is the only time trickle-down economics holds its value,” through heightening money’s velocity. 

UBI’s fleet-footed, fast-flowing cash spills into poverty’s deepest crevices, rejuvenating parched and stagnant urban and rural economic backwaters, driven by instant entrepreneurialism satisfying local demand. 

The kleptocratic and corporate classes’ limp-money velocity is from satisfying tech gadget fetishes or imported entry-level R100 000 bicycles for another peacock-fashion corporate sport, while illegally salting about five percent of GDP off-shore annually “through various tax dodges and transfer pricing gimmicks,” Bond, citing treasury data, says.   

UBI’s economic virility, he says, has the ability to mimic terrain similar to South Africa’s 1930s import-substitution boom averaging above eight percent annual GDP growth rates in the Great Depression’s aftermath.

The grant’s economic rehabilitation powers, however, pose an existential threat to corporate South Africa’s ability to influence, cajole and craft the government’s economic agenda for its own rewards.

“Putting money into poor people’s pockets will put the corporates on the back foot by shifting the economic weight placed on global supply chains and upmarket consumption, once community businesses flourish,” Bond says. 

Corporate denialism  

With the planet burning in the rear-view mirror, climate change denialist Ivo Vegter’s next gig is muddying the UBI waters by grasping at “laziness” and magical arithmetic — usually corporate invoicing’s preserve — in attempts to discredit the grant’s proven intervention for springing society’s poverty trap. 

Vegter, a fossil-fuel industry acolyte, misses a trick to lionise Alaska’s four UBI decades (and counting), disguised as an oil dividend, dishing out about $1 600 annually to every adult in the US state and invalidating the indolence myths. 

The god, guns, gold and tax-cuts creeds awash in the hardline Republican-aligned state excludes resentment towards the universal grant. Polls find majority support for higher taxes to retain the oil dividend once the oil fund is exhausted.

South Africa considered a monthly R100 grant targeting 18- to 59-year-olds in 2002. Six years later, reimagining post-apartheid’s spatial economies was glimpsed by a Namibian civil society-sponsored two-year UBI initiative.

About 100 kilometres east of the capital Windhoek, where “deprivation shaped their lives and they had little hope for the future,” nearly 1 000 Otjivero residents younger than 60 were handed a no-strings-attached N$100 (R100) monthly grant.  

Within a year crimes reported to police dropped 42%. Those subsisting below the food poverty line decreased from 76% to 16%. Parents paying school fees doubled to 90% and income-generating activities increased from 44% to 55%, conjured from a negligible increase in household buying power.  

Paying for it 

Corporate economists’ and risk analysts’ inability to spot an elephant at three paces condemn a universal grant as an “unaffordable” rescue from the tortured idleness of poverty and its sidekick, fury. 

The Black Sash, a leading civil society voice, is calling for a minimum R585 monthly conditional universal grant pegged to the food poverty line. With an 80% uptake by 18- to 59-year-olds, the Institute For Economic Justice estimates the annual tab would be in the realm of R192-billion.

Raising the grant’s funds would include weathering the financial elites’ wails against scrapping tax loopholes (in fact, the lion’s share would be borne by wider society) and an awkward faith in the political classes reducing “irregular and wasteful expenditure”. 

The grant’s proposed funding avenues range from luxury goods taxes to a one-to-three-percent social security tax, similar to the Unemployment Insurance Fund. It would also act as a clearing house for disparate public cash piles, from slices of Lotto to plastic bag levies and the like, as well as a depository for a 10c levy for every e-hailing taxi and e-commerce home delivery.

Stealing it

UBI’s sleight of hand against corruption is its simplicity. Overhauling the grant system, in tandem with a universal grant, would cull about R10-billion from annual bureaucratic costs. 

UBI’s corruption-defence mechanism, divorcing it from other public money vulnerabilities, is rooted in the transaction’s purity between state and citizen, that isolates it from the suit and tie skelms’ shameless feeding frenzies eroding a hard-won democracy. 

Guy Oliver is a Cape Town-based photojournalist and qualified UN Disarmament, Demobilisation and Reintegration specialist