PEOPLES REFERENDUM

For A Basic Income Grant For South Africa (#BIGNOW)

South Africa was an unviable society before Covid 19. With the lockdown the situation is worse, especially for the poor and working class. The government’s extension of the lockdown without a strong enough commitment to address human suffering has to be challenged. The time has come for a universal basic income grant for all.

What will South Africa be like if a substantive Basic Income Grant (BIG) is implemented now?

If South Africa implements a substantive basic income grant during the pandemic, a cash transfer to all citizens of R4500 per person, per month, and subject to progressive taxation if your income exceeds R20 000 per month (currently South Africa has about 7.6 million tax payers), these are its implications.

• Providing a means to address hunger – about 14 million people went to bed hungry in South Africa in 2019 and we can assume this increased with the suspension of livelihoods when lockdown kicked in. In rural areas , 80% of 700 000 farm workers (plus their families about 2.5 million) experience hunger given the exploitative wages earned (the minimum wage is R18.68 per hour). About 9 million children receive a nutritious meal during school but under lockdown this has been compromised in various parts of the country.

• Provide a cushion for unemployment – before South Africa’s lockdown, and based on the narrow definition of unemployment, 5.9 million where unemployed. It is estimated that between 900 000 and 3 million more workers will lose their jobs due to the lockdown. According to the International Labour Organisation due to digital technologies, global value chains and other structural factors unemployment is very likely to go up on a global scale in the foreseeable future. For South Africa the much vaunted Fourth Industrial Revolution is certainly a strategy to displace labour.

• Handwashing and sanitisation will be enabled – about 1.4 million people living in informal settlements do not have access to water in their homes or yards. Almost 3 million (of 19 million ) in rural areas lack access to a reliable supply of water.

• End precariaty - 2.6 million in the informal sector (and about 60 000 to 90 000 waste reclaimers which save municipalities about R750 million a year in landfill costs) and an additional 1 million domestic workers, are all precarious without benefits including unemployment benefits.

• Increase the redistributive bargaining power of labour – by ending dependence on low wage work. The fragmentation of labour unions has weakened their institutional power to ensure higher wages and non-wage benefits. This was reflected in the minimum wage secured of (R20.76 per hour) R3653. Other categories without powerful union densities or unions earn less such as domestic workers (R15.57 per hour) and public works programs (R11.42 per hour). A higher wage floor based on a BIG of R4500 and with workers having pooled household income, gives labour greater bargaining power.

• Increase household income and fiscal stimulus - South Africa has 18 million very poor households (about 9 million in rural areas) that have 5 members with a total monthly income of R2600. Many of these households are highly indebted. Social grants mitigate this situation for 17.6 million beneficiaries but not all these households have grant recipients. Moreover, the child support grant (R445 per month covers 12.5 million children), old age grant (R1860 and those older than 75 receive R1870, covers 3.5 million people) and the disability grant (R1860 covers just more than 1 million people) are just not keeping pace with increasing living costs. A family of four needs at least R2500 per month just to cover food staples. Competing needs for transport and now sanitisers and soaps place immense pressure on such limited resources. More income in households will also have impacts on aggregate demand and kick start the economy.

• Fiscal consolidation – currently the state spends R162.9 billion (2018/2019) on social grants. This is meant to go up to R202.9 billion in 2021/22. The Unemployment Insurance Fund, even after allocating its R30 billion for Covid-19, has R160 billion in investments. A BIG can also be funded through a wealth tax based on income, inheritance and land, as well as, a progressive carbon tax on wealthy consumers and carbon intensive industries. All of these resources can be consolidated together with all grants into one consolidated BIG budget, effectively laying the basis for a ‘post work’ society.

• Institutional roll out – to all South Africans through consolidating bio-metric information contained in SASSA, SARS, the Home Affairs department (based on identity document data) and from banks. In this regard either SASSA and/or the Post Office could be crucial mechanisms to achieve the disbursement, including digitally.

Time has come to build an emancipatory future

South Africa cannot continue a lockdown and confront this pandemic without stronger mitigation measures like a BIG. In the midst of Covid-19, Spain is the first country to commit to rolling out a BIG as a response to the crisis and this will be a democratic systemic reform that will persist beyond the pandemic. The BIG has a history that goes back to the Enlightenment. In the 20th century many experiments and forms of BIG interventions have been tried since the 1970s in the US, Canada, Kenya, Namibia and Finland. Each of these trials where based on specific parameters: target groups, social objectives and levels of income. All the research shows positive outcomes when assessing the social efficacy for the BIG. This has ranged from more investments in human development, less stress, less health costs, greater labour market leverage for workers and less food vulnerability. In the context of the climate crisis and deep just transition the BIG is an absolutely necessary democratic systemic reform to enable the ecological restructuring of our society without harming those least responsible for the problem. If South Africa does not embrace the BIG in the context of Covid 19, together with other public goods, this will be a serious historical mistake and a missed opportunity for a more emancipated future.

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