Can SA afford the Basic Income Grant?

The Basic Income Grant (BIG) debate in South Africa has once again taken center stage in the ongoing discussions surrounding poverty, inequality, and joblessness in the country. A recent study commissioned by business leaders has proposed various funding mechanisms for a basic income grant, with the least undesirable option being an increase in taxes and the VAT rate. Professor Alex van den Heever, the Chair of Social Security Systems Administration and Management Studies at the WITS School of Governance, shared valuable insights on the topic during a TV interview on CNBC Africa. The study conducted by IntelliDex, which was commissioned by Business Leadership South Africa, has sparked controversy with its suggestions on the affordability of a basic income grant and the potential economic impacts. The CEO of BLSA has even gone as far as advocating for the grant to be scrapped in favor of concentrating on economic growth and job creation to alleviate poverty. However, Professor van den Heever offers a different perspective, emphasizing the viability of implementing a basic income support system incrementally over time to provide income protection for the unemployed or those with insufficient income. One of the key arguments made by Professor van den Heever is that employment creation strategies alone cannot address the widespread poverty issue in the country, especially for the vulnerable population aged 18 to 59. He dismisses claims that the current funding for social grants is unsustainable, highlighting that the budget allocated for social grants is well within the government's financial capabilities. The professor also refutes the notion that excessive tax increases are necessary to fund a basic income grant, emphasizing that a carefully planned and progressive approach to scaling up the grant can mitigate economic risks. He urges for evidence-based discussions rather than ideologically driven arguments to address the pressing need for income support in South Africa. The conversation surrounding the implementation of a basic income grant in South Africa is complex and multifaceted, with various stakeholders offering differing views on its affordability, sustainability, and impact on the economy. As the country grapples with high levels of poverty and inequality, finding a balance between economic growth, job creation, and social welfare programs remains a critical challenge. The insights provided by Professor van den Heever shed light on the potential of a basic income support system to alleviate poverty and promote social equity in South Africa.