THE South African Communist Party (SACP) said on Sunday that it supported the call by a number of non-governmental organizations (NGOs) for the introduction of a Universal Basic Income Grant (UBIG).
This follows the party’s three day meeting of its Central Committee, or CC.
The SACP said that unemployment is the most important challenge facing South Africa and must be met with a rapid emergency response.
The official unemployment rate is at a record of 34.4%, or 7.8 million jobless people, according to Stats SA.
The unemployment rate was previously 32.6%, and the number of jobless people was 7.2 million.
SACP General Secretary, Blade Nzimande, said the R350 COVID-19 distress grant can be used as a foundation to put in place the Universal Basic Income Grant.
Nzimande added that the Universal Basic Income Grant will act as an economic stimulus.
“A basic universal income grant can and will act as an economic stimulus least for the millions of South Africans working in the informal and SMME (Small, Medium and Micro Enterprises) sectors that have been most affected by the COVID-19 pandemic. The unemployed and underemployed poor who will be the major beneficiaries of the Universal Basic Income Grant are precisely those who will spend in these sectors of basic foods and other necessities,” says Nzimande.
“All major international studies in basic income grants in other societies indicate important economic multiplier effects.
Nzimande said the current Special COVID-19 Social Relief of Distress Grant can be used as the basis for expanding into a universal basic income grant and this must be phased in as rapidly
as possible.
“We urge all partners at NEDLAC to appreciate the urgency of implementing a universal basic income grant. These partners must now move with a full sense of their responsibilities,” he said.
The SACP said it would continue to interact with the Alliance, trade unions and progressive social movements and NGOs to ensure that there sustained popular pressure and mobilisation for the rapid introduction of a universal basic income grant.
President Cyril Ramaphosa addressed it during the African National Congress Mandela Day webinar.
He saidthat “suggestions have been made that in addressing the needs of our people we must be bold enough to think about interventions such as a basic income grant. Yes, it requires bravery. This matter is being given serious consideration.”
In her department’s budget vote speech in May, minister of social development Lindiwe Zulu said that the need to introduce a basic income grant has become an “urgent consideration” for the national government.
Zulu said that her department “has developed a basic income grant (BIG) discussion document” and was starting consultations “targeted at developing the BIG financing mechanism for the unemployed population group that is aged 19 to 59 years”.
Bheki Mahlobo, an analyst and economic researcher at the Centre for Risk Analysissays funding a UBIG will move South Africa’s budget deficit by 2%, in their estimations.
“The South African government will need to borrow money from local and international sources in order to finance the budget deficit. This debt will need to be paid off by either increasing taxation; or simply printing money,” Mahlobo said.
“This is dangerous for inflation rates that will negatively affect the average South African.South Africa needs to grow the economy. The core issues need to be addressed,” Mahlobo said.
Government will have to find an extra R50 billion in extra income, and add to the tax base.
The government would have to cut back on some budget programs, and increase the Value Added Tax (VAT) rate by 2%.
South Africa may not be able to sustain added grant recipients to the already 18 million already supported by some form of grant, said economist Mike Schussler.
- Inside Politics
