SA needs a basic income grant
THERE has been a furious response from several research and lobbying organisations to rumours of a reform of the welfare system in South Africa.
Apparently, the South African government is considering a local version of the Bolsa Familia, the Brazilian family grant introduced to much fanfare in 2003.
The Black Sash, the Institute for Economic Justice, the Studies in Poverty and Inequality Institute (SPII), #PayTheGrants and Amandla have protested that such an intervention is probably unconstitutional, anti-poor and unfeasible.
Something other than doubts about the workability or fairness of the scheme is at play here, however. The real worry is that a household grant will be used as a substitute for a Universal Basic Income Grant (UBIG). The purpose of reform, that is, is negative: to stall current momentum in favour of a UBIG.
To mitigate the spread of the Covid19 virus, President Cyril Ramaphosa announced a nationwide shutdown in March last year. The economic results were devastating as millions of South Africans found themselves with either reduced incomes or no incomes at all, adding to the millions of unemployed people.
In response to advocacy, the government began designing a welfare response. Several options were on the table, including an expansion of the
Child Support Grant (CSG). Economic modelling, however, suggested that the CSG route was unlikely to reach those whom Covid-19 left most vulnerable: unemployed men without access to social protection.
In the technical language of economists, this meant that the CSG was not very efficient. A Social Relief of Distress (SRD) grant was rolled out instead.
For the first time in South Africa those people not eligible for existing forms of social protection (largely unemployed men) received temporary support. By all accounts, the SRD was a huge success.
For many advocates of welfare reform, the SRD seemed to gesture to an important shift in government thinking. It looked like a step in the direction of a UBIG for South Africa. There had been previous moves in this direction.
In 2002, the government-appointed Taylor committee proposed reforming the welfare system in the direction of a UBIG. The proposal was strongly supported by the DA, but not the ANC. Ultimately, nothing came of the recommendations.
The ANC’s approach to welfare was that it was an interim measure for people temporarily not in employment. Incredibly, the economy was assumed to be fast-growing and labour-absorbing across employment types and skills levels.
Unemployed persons receive protection only in the form of a temporary insurance benefit.
Social protection extends only to those who are financially vulnerable and who care for children.
In the main, women are regarded as child carers and it is largely women who are beneficiaries of social grants. In this way, social protection instruments leave unemployed men exposed. Even under the most optimistic of scenarios, a substantial part of the working-age population will not be integrated in the formal labour market.
As several authors have noted, the current model of welfare underestimates unemployment as a mass, structural phenomenon of the economy.
Wage labour can no longer serve as the main basis for social membership.
Let us leave aside claims that support for a household grant represents bad faith on the side of the National
Treasury. There is enough information in the public domain to reconstruct the arguments that might inform opposition to a UBIG. It is to these that we turn. We do not believe that they are robust.
The arguments can be summarised as: one, a moral argument; two, an argument about efficiency; three, an argument about effectiveness and, four, an argument about affordability.
The first argument reproduces an age-old prejudice about the impoverished, given a gendered inflection in South Africa.
What troubles many policy makers about an unconditional grant is that impoverished people will spend the money recklessly, on booze, or they will get further into debt and so on. Impoverished black men are deemed an especially toxic demographic, so that handing money over to them each month is thought to be a recipe for wastefulness.
It seems that what is lurking behind this assumption is nostalgia for the policing, paternalism and surveillance of the traditional welfare state. In fact, provisional analysis of the SRD grant, which was taken up largely by men, unsettles the clichés.
The second argument is about the efficiency of the UBIG relative to others. It is not clear what measure of efficiency the National Treasury is using.
But if the intention is to reduce poverty, then economists have a test. Assuming that government capacity to administer the grant is the same for all types (we will come to this) they ask how much of each rand spent targets the impoverished.
Recent analysis by the Southern African Labour and Development Research Unit (Saldru) at the University of Cape Town, comprising many leading economists, found that the Child Support Grant was relatively efficient.
The UBIG was apparently the least efficient of the grants. The most efficient, according to Saldru, is the Household Grant. The Saldru analysis has apparently been influential in National Treasury circles.
The UBIG is by definition inefficient on these terms. It is a universal grant whose beneficiaries include everyone, both the impoverished and those who are not impoverished. In the South African context, this is not a weakness but potentially a massive benefit.
The UBIG should not be viewed as a grant, but as the citizen’s income that, according to James Ferguson, acknowledges a kind of nationwide membership and solidarity that would go beyond such political rituals as voting to include rights to subsistence and consumption.
Chipkin and Vidojevic are researchers at Government and Public Policy (GAPP) and Van den Heever holds the Chair in Social Security Systems, Administration and Management Studies at the Wits School of Governance. A full version of this article has been published in www. newframe.com