SA panel proposes gradual start to basic income grant

Treasury has said it will only set aside additional funds for social relief if state finances improve by February.
Image: Waldo Swiegers/Bloomberg

A South African panel recommended the country gradually implement a basic income grant, beginning with the institutionalisation of a monthly welfare payment introduced last year to offset damage wrought by the coronavirus pandemic.

“There is no alternative to a system of income support for income-compromised adults from the ages of 18-59 as a permanent part of the social protection framework,” Alex van den Heever, the chair of social security systems administration and management studies at the University of Witwatersrand and a member of the panel, said Monday.

The panel was appointed by the Department of Social Development, the International Labour Organisation and the United Nations-backed Joint Sustainable Development Goals Fund.

The monthly welfare payment of R350, which was reintroduced after civil unrest in July, is set to end in March.

Finance Minister Enoch Godongwana last month resisted calls by civil-society groups for increased welfare spending and for the introduction of a basic income grant – a policy business organisations say is unaffordable.

Busa: Basic Income Grant should not risk or crowd out spending priorities
Social grants: the research behind the controversy

The National Treasury has said it will only set aside additional funds for social relief if state finances improve by February.

While about 18 million South Africans, or a third of the population, receive welfare payments, most of those come in the form of old-age pensions and child support payments. South Africa is the world’s most unequal nation, according to the Thomas Piketty-backed World Inequality Lab.

Read: A universal basic income grant isn’t the solution

© 2021 Bloomberg


Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in and an Insider Gold subscriber to comment.


As long as this panel pays for it I have absolutely no objection whatsoever!!

The trillion runt figure is the same as making electricity free to the entire country, it is the same as paying people 3 times what the value of their electricity consumption would have been.


Where will the money come from? Would have to double all forms of tax in SA

If they chose to give the market mechanism a chance, entrepreneurs of all races and backgrounds will put more money in people’s pockets, on a viable and sustainable basis, than a highly unsustainable universal income grant can ever accomplish. The Singapore and China experiments proved this point.

At first glance, a universal income grant sounds like a fair and justifiable idea, that may alleviate “inequality” and build social cohesion. In practice though, it will simply scuttle the sinking economy if they force this idea upon the taxpayer who is already overexerted, overexploited, and underrepresented.

The taxpayer cannot carry the cost, therefore they will use deficit spending, and borrow from European pension funds, to finance local consumption. This is the new and more sophisticated alternative to outright colonialization, where African nations spend a large percentage of the income from their mineral wealth on servicing European debt.

This time around, the communalists will purposefully invite the colonizer and eagerly enslave themselves to the international capitalist class through the universal income grant under the smokescreen of the alluring mirage of social justice and equality.

Borrowing to consume is a dead-end street, the road to serfdom.

What an absolute waste of money. How is this an efficient way to redistribute income and combat inequality? What is the long term objective of a policy like this for a country which absolutely cannot afford it?

The perfect path to inflation as everyone spends more and eventually the devaluation of the Rand. Zimbabwe 2.0 here we come.

By all means give money to viable, competency driven start-ups or home businesses but all this would do is raise the stocks of the basic retailers.

End of comments.



Subscribe to our mailing list

* indicates required
Moneyweb newsletters

Instrument Details  

You do not have any portfolios, please create one here.
You do not have an alert portfolio, please create one here.

Follow us: