Basic income grant will do more harm than good for SA's poor
The idea of a universal basic income is based on a cash payment made at regular intervals by the government to members of society; the income is paid irrespective of employment status or earning levels of the society. Its supporters hold that it would reduce poverty and improve livelihoods.
In a recent SAfm radio broadcast interview, presenter Stephen Grootes drew pro-grant arguments from his guest, Isobel Frye, executive director of the Studies in Poverty and Inequality Institute (SPII). She reckoned that the grant could bring stability to the country. One reason for it to be universal is to remove the idea of “shame” of receiving a grant from the state.
Also in support of the grant was Prof Mark Swilling, chairperson of the Development Bank of Southern Africa, also a guest on the show. The professor said the grant would grow the local economy by increasing demand in the domestic market.
An example of an implemented basic income grant which can be commended for taking nationals out of poverty and reducing household poverty is the case of Namibia’s universal basic income grant project, that was trialled from 2007/8-2012/13.
The pilot project was implemented in 2007/8 in the Otjivero-Omitara settlement of the Steinhausen Constituency, where N$80 was provided per person each month to a very small population of about 1000 people.
The pilot ran from 2008 to 2009, with bridging payments continuing at a lower rate until everything came to an end between 2012 and 2013, when the funds were depleted.
According to a 2017ProCon report, the trial decreased poverty rates, where the household poverty fell from 76% to 37% after one year.
It is well to commend the basic income grant for its solution outlook to improve the lives of the poor and unemployed. I commend it fully for that objective. However, I question policy influencers who are pro the universal income grant when they declare that it will bring equality in South Africa’s socio-economy.
To explain it simply - if you give people who are employed and/or well off the same amount of money you give to people who are poor and/or unemployed, you are in fact feeding the inequality by making the rich richer and the poor poorer in comparison.
The universal basic income grant is a steady solution for supporting the poor and the unemployed, however the “universality” of it could only push the poor into poverty from a higher step, in comparison to the rest of society, and these are considerations policymakers should make in development stages of the universal basic income policy.
* Tutu is a driven author, inspired by universal growth and progress. She holds a postgraduate degree in Politics and International Studies from Rhodes University and an honours degree in Journalism and Media Studies from Wits University.
** The views expressed here are not necessarily those of Independent Media.