Letter: Basic income grant urgently needed in this time of crisis
He intimated further that it should be considered as an option to mitigate the crippling impact of Covid-19 on households as the economy braces for a “deep recession”.
Although it could not be introduced yet, he added: “Certainly, it is something that is on my mind. I think about it all the time. I read a lot about it, I study it, I analyse it - all the time,”
Mboweni, who was speaking on a conference call responding to Treasury’s response to the pandemic, on April 14, provided his perspective of the basic income grant proposal.
No decision has been taken to pursue this option, he said.
Mboweni said the issue was a serious question, which must not be dismissed. A basic income grant deserves serious consideration and debate.
It could be introduced incrementally to make it more affordable.
Such a grant is urgently needed for political stability and social justice, particularly in this time of crisis.
Although, inter alia, the Basic Income Grant Coalition, Cosatu and the DA are in favour of this grant, the ANC, as a political party and the government, has opposed it, indicating that it is unaffordable.
The coalition has called for a universal, non-means tested grant. The reason for a means test has proved to be a barrier to the very poor and destitute accessing social grants.
A basic income grant is a measure that could give effect to the constitutional requirement to cater for the immediate basic needs of millions of persons who are living below the poverty datum line and received no social security in the form of a grant.
The basic income grant could play a role in addressing basic subsistence needs, thereby empowering the poor and destitute to begin to take part in the economy. It is also a mechanism for income redistribution that can promote greater economic equality, social justice and stability.
The coalition has carried out research which shows that the grant is the most effective policy option for eliminating destitution and reducing poverty. It gives everyone a real stake in South Africa’s future and has the potential to transform the country.
It can be argued that, at this time of crisis this kind of grant, is unaffordable. However, it could be introduced incrementally over five years. What is required is a vigorous and an informed debate between the role-players in order to induce the government to commit itself to the principle.
I have tried, over the years, to precipitate such a discussion by raising the issue at party political meetings.
I hope now that the finance minister has expressed his positive sentiment in this regard, as well as the 76 economists referred to above, a serious discourse and debate on the issue will get under way.
George Devenish is Emeritus Professor at University of KwaZulu Natal.