I have been overwhelmed with responses to my tweet👇of DSD Minister announcing governments intention to implement a #BasicIncomeGrant. Leaving aside the usual attacks by trolls, serious concerns raised can be boiled down to 8 issues. I deal with these as best I can below. Thread:
1. *Why is it only proposed to benefit those from 18-59*? The reason is that there are extensive grants for children and pensioners, & the big gap is the poor & unemployed from 18-59. If the grant for this group is universal (not means-tested), then it will be a BIG
2.*Why now, when the Covid-19 unemployed grant has been such a mess?* The crisis of unemployment & poverty (over 10 million unemployed, & over 50% in poverty) is growing as the Covid crisis deepens. The Covid grant expires end October. There has to be something to replace it. A
universal grant will be much easier to implement, as everyone is entitled to receive it, unlike the bureaucratic nightmare of the Covid grant. We need to see if the proposal makes it universal, as claimed.
3. *Won’t it create dependency?* Studies of SA, & the international experience eg Brazil show that giving people access to income encourages them to come into the labour market. Many ‘discouraged unemployed’ have given up looking among others because of transport costs.
4. *Why should the rich/ middle class benefit?* While everyone should be entitled to the grant, the simple way to recoup it from those who don’t need it is to take it back via a solidarity tax. And the wealthy can cross-subsidise >1 grant via tax.
5. *Shouldn’t we rather focus on jobs?* This isn’t an either/or. The stimulus impact of putting >R100 bn into poor households will promote spending in communities & demand for locally produced goods. But a BIG must be complemented by a jobs-rich macro economic &industrial policy.
Also the reality now is that government cant provide jobs for everyone, as we head towards 50% unemployment. A jobs strategy is desperately needed, but must be complemented by comprehensive social protection for all.
6. *Corruption & inefficiency in govt mean the money will be stolen, & the BIG not implemented* The beauty of the BIG unlike other programmes, is its paid directly to beneficiaries, & less prone to corruption, & can use smart tech. Its simplicity also makes it easier to implement
7. *Government is bankrupt, how will we fund it?* This will clearly be a large commitment. But theres a debate raging about the need to marshall resources to tackle the crisis we face, & many argue that conventional (eg tax) & unconventional methods can unlock huge resources.
What's clear is with political will, creativity, & serious consideration of financing options, this can be done. Govts around the world are showing a *do what it takes* approach to address their crises. Economists since the Taylor Comm have shown such a scheme is affordable, and
socially beneficial. Further, a massive stimulus of this nature will begin over time to fund itself, or at least a significant portion. The virtuous cycle of economic stimulus, demand for SAn produced goods, rising taxation etc, is an Nb factor in its sustainability.
8. *Isn't a BIG irresponsible, &a ruse by govt to avoid losing elections*?If a BIGs introduced as a result of social pressure, this isn't a bad thing, &shows govt's being forced to address the crisis facing the poor. It would be irresponsible not to act in the face of this crisis
A lot of the above will depend on the design of the BIG system, whether it is truly universal, plans for financing etc. This is why its so NB for government to put its proposal ASAP so society can engage on the ideal design. Must be done urgently, for implementation by November.
