The Basic Income Grant (BIG) has been given the green light to be introduced to South Africans.
The grant has been in discussion for quite some time now, with many advocating for its implementation due to the devastating impact of the rising cost of living, the Covid-19 pandemic and the sky-high unemployment rate on South Africa's most vulnerable people.
The South African government wants to increase the scope of social support to include unemployed adults.
The Department of Social Development (DSD) has been investigating ways it could introduce basic income support for vulnerable adults, and finally, the Department now believes that it is possible to implement a Basic Income Grant in a way that is financially sustainable and does not comprise economic growth.
The Social Relief of Distress (SRD) grant (also known as the SRD grant) will now permanently be introduced as the BIG grant, which would provide income support for individuals between the ages of 18 and 59 who are financially struggling, unemployed and don't have any social assistance.
Professor Alex van den Heever from Wits University recently introduced research findings, addressing the BRICS Research Network Session organised by the Department of Employment and Labour.
The research indicated the possibility of implementing the Basic Income Grant, while protecting economic growth through "a balanced budget approach and important redistributive affects."
In this year's State of the Nation Address (SONA), President Cyril Ramphosa announced that work was underway to develop a mechanism for a targeted Basic Income Support (BIS) for the most vulnerable citizens.
"Owing to the rising cost of living, and with the view to cushion the most vulnerable among South Africans from the effects of known and novel risks alike, the Social Development portfolio is in the process of devising a Basic Income Support," said the President.
The SRD grant was the starting point for the consideration of a basic income grant, which was introduced during lockdown as an interim measure to sustain people who were in need during the pandemic.
In 2021, the DSD appointed an expert panel to investigate the social and economic implications of introducing Basic Income Support (BIS) at scale, which was completed in that same year and examined the social and economic impact of introducing BIS, while the second analysis looked at different funding models for the introduction of basic income grants.
While many are onboard with the implementation of the BIG, some remain skeptical.
Many concerns have been raised regarding how government plans to fund the grant and whether or not it will be of actual use to people in need, with some fearing that the South African government is not thinking about more sustainable solutions to tackle ongoing socio-economic challenges.
The modelling work produced in the research report (presented by van den Heever) analysed the SRD Grant on a "zero-based budgeting basis", effectively assuming that the outlay must be financed from new sources of revenue.
Van Hen Heever says given South Africa’s extreme income inequality, revenue raising options for new redistributive programmes, such as the SRD Grant, should make use of progressive taxation options.
The intention behind the implementation of the BIG is to provide assistance to South Africans struggling to keep up with the cost of living.
