<
https://theconversation.com/basic-income-support-in-south-africa-risks-rewards-and-what-it-will-take-176821>
"Some form of basic income support is central to the South African government’s
agenda. The lockdown-induced shocks have added to the crisis of structural mass
unemployment and of poverty. There also seems to be broad consensus that basic
income support is an essential part of the country’s social compact.
But the fiscal risks it poses to a fragile economy have not diminished. And
government faces some hard trade-offs to ensure these risks are minimised and
that other social spending is not compromised.
A small cash grant to the poorest workers was introduced as an ad-hoc and
temporary response to the collapse of employment induced by the COVID-19
lockdowns. The COVID social relief of distress grant operates in terms of
national disaster regulations, and its financing depends on periodic extensions
announced in the national budget.
But the success of the grant has underscored a broad consensus in favour of
continuation. The first attempt to withdraw it ended in defeat for the Treasury
in the wake of the organised unrest of last July. Since then, the president has
clearly warmed to the idea. The minimum wage helped him forge the coalition of
factions in the African National Congress (ANC) that backed him in 2017.
Continuing with basic income support may well be necessary to secure his
re-election at the 2022 ANC conference, and victory for the ANC in 2024. By
then the grant would have been in place for five years, and it would not make
sense to think of it as temporary.
It now seems clear that income support for the poorest citizens of working age
is a new element of South Africa’s fiscal constitution – a contract on which
sustainability of democracy depends. Legislation that defines the beneficiaries
and design of the grant will take time to pass. In the meantime, the budget
will have to accommodate a structural increase in spending of R50 billion to
R100 billion, or about 1% of GDP.
But will it happen?"
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
