Presentation | The struggle for basic income in South Africa

Neil Coleman & Dr Kelle Howson
Presentation – University of Bath Lecture Series
19 October 2023

Introduction: A Global Call for Human Rights

The struggle for basic income is not merely an economic debate; it’s a fight for human rights and dignity. As we embark on this discourse, we cannot overlook the gross human rights violations witnessed in Gaza. This series is timely, with a global focus on basic income. The challenge now is to transition from evidence-gathering to large-scale implementation. South Africa, with its unique context, could emerge as a global leader in the basic income movement.

South Africa: A Potential Global Leader

Will South Africa lead the world in Universal Basic Income (UBI)? The urgent need arises from rampant hunger, poverty, and unemployment. The existing COVID-19 SRD grant indicates a move beyond evidence gathering. With widespread support from civil society, trade unions, and the government, UBI in South Africa targets working-age adults, addressing deep structural issues perpetuated by historical injustices and inappropriate macroeconomic policies.

The Deep Crisis: A Call for Urgent Action

South Africa faces a multifaceted crisis – hunger, poverty, unemployment, and extreme inequality. The numbers are staggering: over a quarter of the population lives below the food poverty line, more than half in poverty, and 42% unemployed. A historical legacy of apartheid planning exacerbates these challenges. The call for a UBI is not just an economic necessity but a moral imperative to address the structural inequalities.

Political Economy of UBI: Addressing Structural Factors

The political economy of UBI in South Africa hinges on addressing deep-rooted structural issues, such as landlessness, a small informal economy, financialization, and historical marginalization. In this complex landscape, a basic income rollout could circumvent the crisis of state capacity, providing direct relief to those in need. The stimulus impact of income injection into poor communities becomes a platform for economic renewal.

UBI: A Global Relevance

Internationally, UBI is relevant in addressing economic hysteresis, climate crises, labor displacement, rising inequality, and growing hunger. It serves as a countermeasure to economic distress, particularly in the Global South. South Africa, with its pervasive poverty and inequality, stands as a crucial battleground in the global fight for a basic income.

UBI: A Radical Yet Controversial Demand

The demand for UBI is not revolutionary, but it holds radical potential. While controversial due to concerns about replacing public services and undermining workers, it aligns with global movements for economic transformation. Addressing concerns raised by the ILO paper is crucial to ensure its success. A UBIG, if meeting certain conditions, can be a progressive force for the working class, providing economic stability and empowerment.

UBI: A Boost for Progressive Movements

In a period of demoralization and fragmentation of progressive forces, UBI could offer hope and confidence to people facing deep crises. Progressive movements find an anchor in UBI, fostering resilience against economic fluctuations. The debate between UBIG and a jobs guarantee should not be seen as a binary choice; both can coexist to address multifaceted challenges.

Fierce Contestation: Challenges and Opportunities

The road to UBI is fiercely contested globally and in South Africa. Capital and conservative bureaucracies resist the idea, seeking to undermine its potential impact. Attempts to dilute UBI demand may include tokenistic implementation, means-testing, reduction of public services, coercive workfare, and regressive taxation. Achieving UBIG in South Africa requires navigating a complex political landscape, but the social crisis, mobilization, and political engagement create a possibility for progressive outcomes.

The South African Context: Political Resistance and Significant Support

The South African context reveals a nuanced picture. Extensive civil society campaigns have made the SRD grant politically irreversible, yet Treasury and regressive forces aim to roll it back. The ANC, despite internal divisions, endorsed UBIG in policy conferences, supporting a wealth tax to finance it. The struggle for a basic income in South Africa faces resistance from powerful forces, but the real possibility of progress exists, driven by a combination of social crisis, mobilization, and political engagement.

The SRD Grant and Transition to Basic Income

The SRD grant, introduced during the COVID-19 crisis, has become a crucial focal point. Despite administrative injustices and contestation, it has had positive impacts on poverty alleviation, employment, and economic stimulus. As South Africa contemplates a transition to basic income, the contestation around the SRD grant intensifies. Litigation, political dynamics, and the financial context shape the path forward.

Financing a Basic Income Grant: Navigating Fiscal Challenges

The question of affordability looms large in the debate over basic income support. Fiscal challenges, including stagnant growth, declining tax revenue, and high debt costs, present hurdles. Austerity measures and proposed VAT increases threaten to undermine the poverty-alleviation impact of a basic income grant. Navigating these challenges requires a shift from austerity to inclusive economic growth and exploring progressive financing options.

Macroeconomic Impacts of Basic Income: Beyond Expense to Development Policy

A basic income grant is not just an expense; it’s a development policy with far-reaching impacts. International evidence shows that it boosts economic activity, job creation, and social well-being. The macroeconomic benefits, including increased consumption, investment, and improved collective bargaining power for workers, create a positive feedback loop. A well-designed basic income grant becomes a catalyst for sustainable economic growth and a way out of the fiscal crisis.

Designing a Basic Income Grant for South Africa: Building a Progressive Framework

The positive impacts of a basic income grant depend on its design. Recent proposals from civil society and government emphasize building on the SRD grant, progressive realization of universality, non-regressive financing mechanisms, and addressing inequities in application and payment infrastructures. A well-designed basic income grant should complement existing public services, maintain parity with the child support grant, and foster social cohesion.

Conclusion: A Bright Light in a Dark Terrain?

The struggle for a basic income in South Africa reflects not just economic challenges but a broader quest for human rights and dignity. While fiercely contested, the potential for progress exists, driven by a combination of social crisis, mobilization, and political engagement. As South Africa navigates the complexities of financing, macroeconomic impacts, and design, the prospect of becoming a world leader in basic income support stands as a beacon of hope in an otherwise challenging terrain. The journey ahead will require resilience, strategic engagement, and a commitment to transforming the economic landscape for the benefit of all.