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Pressure mounts on Finance Minister Enoch Godongwana to introduce universal basic income grant

Finance Minister Enoch Godongwana faces mounting pressure to introduce a universal basic income grant (BIG) and drop austerity measures amid crippling poverty and rising unemployment levels in South Africa. Photo: Phando Jikelo/African News Agency(ANA)

Finance Minister Enoch Godongwana faces mounting pressure to introduce a universal basic income grant (BIG) and drop austerity measures amid crippling poverty and rising unemployment levels in South Africa. Photo: Phando Jikelo/African News Agency(ANA)

Published Feb 15, 2022

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Finance Minister Enoch Godongwana faces mounting pressure to introduce a universal basic income grant (BIG) and drop austerity measures amid crippling poverty and rising unemployment levels in South Africa.

A group of about 70 members of the Assembly of the Unemployed (AoU) yesterday staged a sit-in at the National Treasury, calling for the implementation of a BIG and protesting against budget cuts.

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The AoU and other civil society movements have long campaigned for the implementation of a BIG of R1 500 a month for all unemployed between the ages of 18 and 59.

AoU spokesperson Princess Majola said the grant should also include caregivers, home-based workers, and workers who earned below the national minimum wage.

“This will bring much-needed relief to millions of South Africans who are languishing in poverty,” Majola said.

“We are disappointed that President Cyril Ramaphosa failed to announce the implementation of a decent basic income grant during the State of the Nation Address last week.”

In his address, Ramaphosa said government would extend the R350 Social Relief of Distress (SRD) grant for the unemployed, to March 2023.

Ramaphosa said any future support must pass the test of affordability and not come at the expense of basic services, or at the risk of unsustainable spending.

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There are currently 12.9 million unemployed people in South Africa under the expanded definition, putting the government under enormous pressure to introduce a basic income grant.

In December, a panel appointed by the Department of Social Development, the International Labour Organisation and the UN’s Joint Sustainable Development Goals Fund recommended gradually implementing a basic income grant for income-compromised adults.

The Institute for Economic Justice (IEJ) said the resources for the implementation of the universal BIG were available, but state inaction was a policy choice rather than an absence of feasible policy and financing options.

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“The documented social and economic benefits of the extension of the SRD, and the possible future adoption of a universal BIG, will, however, be limited if Treasury maintains austerity measures and further constrains spending on public services,” IEJ researcher Zandile Mncube said.

The National Treasury yesterday could not comment on the feasibility of a BIG, presumably leaving it to Godongwana to make a pronouncement during his Budget speech next week.

Old Mutual Wealth investment strategist Izak Odendaal said the country could afford to provide an extended social safety net that will blunt the impact of poverty.

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Odendaal, however, warned that the fiscus could not afford to do so in the current budget framework on a sustained basis.

“Wisely, the commodity windfall is not expected to last and therefore the government knows that increased social spending will have to be accommodated by cutting spending elsewhere (reprioritising) or raising taxes.

“Until that is figured out, the R350 per month Social Relief of Distress grant, extended for another year to March 2023, is likely to remain in place," he said.

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