The Institute for Economic Justice (IEJ) eagerly awaits the details of President Cyril Ramaphosa’s 2022 State of the Nation Address (SONA) this evening (10 February 2022). The IEJ hopes that the President articulates a bold agenda for government – an agenda that is responsive to South Africa’s interlinked triple crisis of poverty, entrenched structural unemployment, and inequality.
The IEJ hopes that the agenda put forward avoids creating a hierarchy of deprivation by pitting poverty alleviation, job creation and the provision of basic services against one another. Job creation and retention, maintaining and expanding income support, and sustaining and improving public services are all required, and interdependent.
The opportunity exists for the President to create a new social compact that places the needs of the majority of people in South Africa at the centre of government’s work. A new social compact that prioritises social spending and human well-being, where everyone’s basic needs are met. The means to do so are available.
There are currently 12.9 million unemployed people in South Africa (under the expanded definition). Structural mass unemployment is a reality that demands a broad range of micro and macro economic interventions to create and retain jobs. If implemented, the impact of these interventions are only likely to gain traction in the medium term and will invariably, in the medium term, have only a limited impact on the overall scale and persistence of unemployment. The scale and immediacy of poverty and hunger however requires decisive interventions now.
In this context then, the extension, improvement, and expansion of the Social Relief of Distress (SRD) grant, with a firm commitment to the immediate adoption of a Universal Basic Income Guarantee (UBIG) and its implementation by no later than 2024, is needed. A broad coalition of civil society organisations have been articulating this demand.
The IEJ along with these civil society partners have shared concrete and feasible financing options with Treasury on how to make the extension of the SRD and the financing of the UBIG possible. The Constitution requires government to ensure that the right to social security is met within available resources. The resources are available. State inaction on this then is a policy choice rather than an absence of progressive and feasible policy and financing options.
The documented social and economic benefits of the extension of the SRD, and the possible future adoption of a UBIG, will however be limited if Treasury manitains austerity measures and further constraints public spending on public services. Austerity and slashed budgets will only serve to force poor households, whether they are grant recipients or not, to spend limited resources on services the government should be providing. Reducing public-care services also has a negative gendered impact in that it increases unpaid care work and forces women to provide a safety net for families.
Given these interdependencies between jobs, grants, and public services the IEJ hopes the President will commit government to undertake the following in the coming year:
- Ensure that the Presidential Employment Stimulus (PES) is resourced to increase its reach and impact and ensure workers are directed towards labour-intensive and hard-hit sectors.
- Retain jobs by reinstating wage support via the Temporary Employment Relief Scheme (TERS).
- Increase funding towards sector-specific Master Plans to ensure that localisation is supported and job creation enhanced.
- Extend the SRD grant for at least a year, or until the implementation of a UBIG, and increase it to the FPL of R624.
- End budget cuts.
For enquiries, contact:
Dalli Weyers, Advocacy and Communications Lead, 082 460 2093 | dalli.weyers@iej.org.za
Basani Baloyi, Acting Director, basani.baloyi@iej.org.za
Zimabli Mncube, Researcher – Budget & Tax Justice, zimbali.mncube@iej.org.za
Kelle Howson, Senior Researcher – Workers’ Rights & Social Security, kelle.howson@iej.org.zaBandile Ngidi, Rethinking Economics Project Lead, bandile.ngidi@iej.org.za
Read the media statement and presentations below.