In comes social development minister Lindiwe Zulu, who unexpectedly brought up a two-decade-old plan to introduce a universal basic income grant to support millions of unemployed. Given the forecast calamity on the horizon, it is good the plan is on the agenda. But she seems to have neglected to discuss it with her colleagues in the government.
It’s not difficult to imagine that a Treasury in fiscal consolidation mode would push back against any additional spending. It has already set aside R229bn to cover existing social grant programmes for pensioners as well as additional money to support vulnerable households during the lockdown, amounting to 16% of the revenue in the supplementary budget.
Assuming the scheme’s ultimate beneficiaries are an estimated 10-million people already out looking for jobs, plus an additional 7-million the Treasury forecast would be laid off this year, who will each be paid R1,270 — the upper band of the latest Stats SA poverty line that includes non-food expenses — it would cost the state at least R21bn a month, or about R252bn a year.
While we agree with Zulu’s sentiment that it is undeniably painful to see millions suffering, we strongly caution against putting in place an important and expensive policy with little to no research.
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