Unions feel taxpayers must foot the bill for increased basic income grants

Unions feel taxpayers must foot the bill for increased basic income grants, Newcastillian
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This follows the South African Federation of Trade Unions (Saftu) reiterating calls for the introduction of a basic income grant. This will work as a long-term extension of the current Covid-19 financial support, which is presently being extended to South Africans.

During a presentation on Wednesday, 24 September 2020, Saftu secretary-general Zwelinzima Vavi stated, the current social grants are meagre, a problem he felt needed to be addressed.

Vavi goes on to describe, the Temporary Employee/Employer Relief Scheme (TERS) of R350 a month, must be transformed into a Basic Income Grant of at least R1,500. This, he claims, is to enhance sufficient demand for all South Africans.

Assisting people in their time of need is a responsibility the Government must carry. But to cure poverty, local industry creation coupled with decreasing imports and chaotic, crippling loans as a result of disgusting levels of corruption, appears to be the short and long term treatment to poverty. 

But, Vavi believes he has the solution, suggesting an increase in progressive taxation rates will allow a claw-back of all the funding required for the grants.

During the month of July, Lindiwe Zulu, the minister of Social Development, stated South Africa would be introducing a universal basic income grant. This grant is expected to form part of a range of packages to help unemployed South Africans.

While Zulu did not elaborate on the details of how much the grant will be, nor on how the grant would be funded, she said it would be paid ‘post-October’.

Adding to this, the ANC has mentioned before, it will be looking at the feasibility of introducing said, basic income grant. This will form part of a series of outcomes which will be decided upon by its National Executive Committee (NEC).

According to a document seen by Bloomberg, the ANC has proposed to pay a monthly grant of R500 to people aged between 19 and 59 years. These people will consist of those who are not usually eligible for other forms of financial aid, and it will cost the state an annual figure of a jaw-dropping R197.8 billion.

Furthermore, it said that between 50% and 60% of the money could be recouped by levying extra taxes on those with jobs.

Looking at the cost of the basic income grant, Intellidex analyst Peter Attard Montalto claimed, the debate around a basic income grant has been ongoing for almost two decades. He adds it has also been a subject of research, which found it could reduce poverty in the country by as much as 75%.

The biggest issue, however, is affordability.

With discussions underway about establishing a basic income grant, what are your thoughts? What do you think about possibly paying extra taxes to help support the unemployed who do not qualify for other grants, such as SASSA?

Authors: Quinton Boucher and Calvin Swemmer

Edited: Calvin Swemmer

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Quinton Boucher

Quinton Boucher

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