Government planning basic income protections for South Africa: Ramaphosa

Government plans to introduce a basic level of social protection for the country’s most vulnerable workers, says president Cyril Ramaphosa.

Writing in his weekly letter to the public, Ramaphosa said that this would need to be done within the country’s constrained public finances, with the government already offering support measures through systems such as the R350 social relief of distress grant.

“With the end of the national state of disaster last month, we are engaging with various stakeholders on how to ensure that the grant continues to reach those who most badly need it. This is happening alongside measures to promote employment, like the Presidential Employment Stimulus, which has provided work and livelihood opportunities to more than 860,000 (people) since it was started.

“It includes the expansion of the Employment Tax Incentive to encourage small businesses to employ more people, a loan guarantee scheme that has been redesigned to provide finance to smaller businesses, and the reduction of the red tape that holds back the growth of businesses.”

Ramaphosa said the government was also undertaking fundamental economic reforms that will improve the competitiveness and economic contribution of the energy, water, telecommunications and transport industries. These reforms, together with increased investment in infrastructure, will enable faster economic growth and employment creation, he said.

“In the long term, these reforms will unlock much higher economic growth. And as businesses grow, they will create more jobs, helping workers and unions in a virtuous cycle. However, the workers that gathered at the Royal Bafokeng Stadium and millions of other people across our country cannot wait for the impact of these reforms to be realised.

“That is why, as we implement these measures, we are seeking – within our constrained public finances – to provide a basic level of social protection to the most vulnerable.”

How much – and who pays? 

In February, the National Treasury said it was still considering proposals around a universal basic income grant for South Africa, but it maintained that it cannot be done in a fiscally irresponsible way.

Finance minister Enoch Godongwana said that, in view of the Covid‐19-related job losses and increasing poverty and inequality, Treasury and the government should seriously consider a basic income grant after the necessary consultations with relevant stakeholders.

These consultations were expected to yield some results by the time of the 2022 budget. However, Treasury said that it still doesn’t have an answer on a Basic Income Grant just yet.

“The Covid‐19 pandemic increased national debate on the possibility of a universal basic income grant, and the government is considering various proposals in this regard,” it said.

“Any proposals to expand this system need to be fully and appropriately financed by closing existing programmes to free up revenue, or through permanent increases in revenue collection.”

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Government planning basic income protections for South Africa: Ramaphosa