At the start of the COVID-19 pandemic, President Cyril Ramaphosa announced a basic income grant to those who were the most affected by the extensive shutdown of the economy. This grant runs out in October. Stan Muyebe warns that unless the government puts measures in place to protect this vulnerable group, millions could be plunged into abject poverty amid a continued sluggish economy.
The COVID-19 Social Relief of Distress Grant (SRD) is due to expire in October. Although the R350 grant was not adequate to cover basic leaving expenses during the six-month lockdown, it was nevertheless a small contribution to poverty relief in the context of massive job losses brought on by the pandemic.
Slow economic growth amid a global economic crisis will not have the capacity to absorb all the unemployed in the foreseeable future. It is therefore important for the government to seriously consider extending the special COVID-19 grant beyond October. In the long-term, it should also introduce permanent social protection for the unemployed, especially the so-called “missing middle” — unemployed persons between the age of 19 and 59 who do not qualify for the social grant.
The government should also publish its policy position on the basic income grant that it announced in July. This would serve a dual purpose. Firstly, it would show that the government is actively seeking to reduce the suffering of those who have been the worst affected by the pandemic. It would also encourage engagement and input from various stakeholders, especially in relation to the financing mechanism for the grant. In a time of low economic growth and decreased tax revenues, the fiscal space for further expansion is severely constrained. The government should engage in broad-based consultation, including civil society organisations, to develop workable solutions.
The government’s announcement of the grant in July lacked detail. It was a stand-alone interim measure at the start of the pandemic and lacked a long-term vision that requires the restructuring of the entire social policy system. The biggest deficiency of the current structure is that it does not allow the missing middle, consisting of about 32 million people, to meaningfully access social security.
The financial precarity of the missing middle has been dramatically exposed by the massive job losses during the pandemic. In addition to the loss of income, they also have to contend with food inflation, potential homelessness, and other pandemic-related impacts. Without effective intervention, in the form of job creation and social protection, there is likelihood that a significant percentage of this group will slide into extreme poverty, which in turn is likely to result in an escalation of social protests. It is therefore a priority to integrate this age group into a safety net framework without, however, creating a culture of dependency.
South Africans living on the peripheries of the economy should not be left to fend for themselves amid trying economic conditions. They also deserve access to the necessities of life because they are bearers of God’s gift of human dignity, which should be enjoyed equally by all human beings. God did not create extreme poverty. The widening gap between the extremely rich and the extremely poor is the result of society’s reluctance to share equitably and a severe lack of social solidarity. The basic income grant is an expression of social solidarity and it should form the basis for a new society in the post-COVID-19 era.