Johannesburg- To go BIG (basic income grant) or not?
This is the question facing President Cyril Ramaphosa as he prepares to deliver his last State of the Nation Address before the ANC heads to its elective conference in December, where he is expected to be challenged for the top post in the party.
Ramaphosa has been warned by the presidential economic advisory council not to implement a permanent BIG as the multibillion-rand cost could see debt surge and hinder economic growth, according to several reports.
A civil society grouping made up of the Institute for Economic Justice (IEJ), Black Sash, Studies in Poverty and Inequality Institute met Ramaphosa, Finance Minister Enoch Godongwana and Social Development Minister Lindiwe Zulu last week to advance their case for BIG.
The IEJ in its presentation said BIG would cost about R250-billion a year.
There have been suggestions bandied about that a hike in personal income tax and value-added tax (VAT) were inevitable if the government introduces BIG.
IEJ economist Dalli Weyers said an increase in VAT would be regressive and hurt the very people BIG is meant to assist. He said there are numerous pathways to introduce BIG, including increasing wealth and inheritance tax.
“Our main recommendations include: immediately extending the Covid-19 social relief of distress (SRD) grant, expanding its eligibility criteria to reach more people, and increasing the amount to at least the food poverty line (R624).
“Importantly, its current existence relies upon regulatory powers provided under the state of disaster, which faces the growing possibility of cancellation.
“Therefore, if the SRD lifeline is not to be prematurely cut, it must now be extended via adoption in the social assistance legal framework until at least February 2023, or until a BIG is phased in,” he said.
Cosatu spokesperson Sizwe Phamla said the federation supports the basic income grant as this will help deal with challenges faced by unemployed people.
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