The Financial and Fiscal Commission (FFC) says that the Covid-19 pandemic and introduction of the R350 Social Relief of Distress Grant have provided some impetus for discussing a basic income grant in South Africa.<\/p>\n
The FFC is an independent constitutional advisory institution. Its role is to advise and make recommendations to Parliament, provincial legislatures, organised local government, and other state organs on financial and fiscal matters.<\/p>\n
While the debate around a universal income is still ongoing, the group said that finance minister Enoch Godongwana would need to consider such a grant’s fiscal impact.<\/p>\n
In a presentation to parliament this week, the FFC said that the costs associated with a standard basic income grant are large. A true universal income set at R350 per month would cost approximately R243 billion per year<\/strong>, based on the 2020 mid-year population estimates.<\/p>\n This amounts to 5% of GDP. The cost would increase the revised budget deficit from 15.67% of gross domestic product (GDP) to 20.15%.<\/p>\n However, a more streamlined grant of R350 per month to target the unemployed – using the expanded definition – between the ages of 18 and 59 years would cost R44.8 billion per annum<\/strong> or 0.9% of GDP, it said.<\/p>\n “Naturally, the total costs estimated here are high and would be lower if the BIG were to partially or totally displace grants in the existing system.”<\/p>\n