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The Basic Income Grant: Poverty, Politics and Policy-making
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4. Some of the 'technical' issues in the BIG debate
Affordability:
Throughout history 'affordability' has been used a reason not to implement radical social reforms. So the 'New Deal' in the USA was opposed by US business for the same reason, as was the case with the Beveridge social security reforms in Britain. In most cases, when a national crisis was recognised the argument of affordability was set aside.
Of course, with 'affordability' you also have to look at the cost of not acting. Delaying necessary spending to save money is false economy, because the cost gets higher once the damage is done.
Most importantly, what does 'affordability' mean in the context where income and company taxes have been cut by R48 billion since 1996? This is more than three times the net cost of the BIG (+ R15 billion).
Economic growth:
There is a growth and development strategy paper doing the rounds which disingenuously argues that "[W]ith growth, poverty decreases…" - inferring an automatic relationship between economic growth (estimated at a low 2,6% of GDP for 2003) and poverty reduction.
However, it does not take much to know that South Africa has very skewed patterns of distribution. With South Africa's extremely high levels of inequality you need extremely high levels of economic growth, for there to be any meaningful trickle down to the poor.
Dependency:
Since the demise of 'affordability' as an objection, it is now argued that a BIG of R100 will 'create dependency'. Let's just think about the logic of this view - that giving greater income security to, say, a poor woman is going to make her more dependent than she already is. You would think that this woman is already dependent on others, possibly an abusive partner whom she cannot afford to leave. Poverty, after all, creates the worst kind of dependencies.
The 'creating dependency' argument is also extremely hypocritical. We are all dependent, after all. A man is dependent on his wife. A student is dependent on her teacher. Most of all, businesses and the rich in this country are heavily dependent on explicit and implicit state subsidies.
Lastly, several of the alternatives to a BIG (such as public works) clearly carry a greater dependency than a BIG, as one discovers when a scheme ends in a particular area.
Administrative capacity:
This is a real issue. Any new social security system requires that a new administration system be developed to implement it. This is obvious. So it is disingenuous to argue that a proposed scheme is unviable because the administrative system doesn't exist at the time that the scheme is proposed.
It was for exactly that reason that the Committee recommended that BIG is phased in, allowing time for the development of administrative capacity.
This included the creation of a national social security agency to deliver the scheme, and the completion of a new ID system. In both of these areas there has been progress. A new ID system is being developed and is due for completion by 2005; and a few weeks ago, Cabinet approved the creation of a national social security agency.
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