Africa-Press – South-Africa. The DA believes there could be sufficient funds to introduce a conditional universal basic income grant (BIG) of R585 per month for unemployed adults, which would cost taxpayers an estimated R157 billion per year.
It would be provided on the understanding that it would only be made available when there was sufficient revenue generated from economic growth.
According to the DA’s finance gurus in Parliament, the feasibility of funding a BIG is contingent upon a substantial and sustained increase in economic growth.
During a press briefing on Monday, DA MPs Dion George, Bridget Masango and Ashor Sarupen presented an alternative budget ahead of Finance Minister Enoch Godongwana’s Budget address later this week.
“The DA is in favour of providing conditional direct income support for the most vulnerable in our society as it provides an economic floor and channels funds into the hands of consumers who are best placed to decide where to spend it. This makes for a more efficient distribution of resources relative to a coupon or the current grant system, as the market makes more efficient allocative decisions than the government,” Masango said.
According to Masango, literature about global practices on unconditional cash transfers demonstrated that beneficiaries didn’t abandon the search for work, but that grants were used to support the search for jobs.
“It is only when the government does accrue the necessary savings, achieve a budget surplus, implement the requisite policies that would spur economic growth, and is able to substantially reduce debt, could a BIG grant be tabled for serious consideration,” she said.
“If a BIG is not funded by growth the large immediate expansion of social transfers would threaten fiscal sustainability and lead to significant employment losses by actually decreasing economic activity and growth.”
According to the DA, a BIG is contingent upon sustained increase in economic growth.
“This can be achieved through the adoption and implementation of a market-oriented policy framework by the DA, including increased infrastructure investment, expansion of labour market participation, and crucial economic reforms that bolster private sector involvement,” Masango said.
Meanwhile, George said there was a need to expand the zero-VAT rated basket of food.
“The basket is designed to help reduce the financial burden on vulnerable poor households by making essential food items more affordable. The current basket includes items such as bread, maize meal, and brown bread. However, there is a strong case to be made for the expansion of the zero-VAT rated basket. Dropping the 15% VAT on these items would aid households in making ends meet while enabling them to purchase more nutritious food,” he said.
George added that the DA would not endorse additional taxes or increments in tax rates on already struggling consumers.
“South Africa is not a poor country. We are a country poorly managed and this leads to the problems,” he said.
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