Experts have weighed the risks and benefits of the proposed universal basic income grant (BIG)
The EFF is one of several opposition parties who have long supported a universal basic income grant.
“The government is playing with fire, all these grants that they are talking about, is temporary measures. All of us know that the government is bankrupt, were will the money come from? The country is in Junk Status. The government itself is speeding up this ticking time bomb to explode.” “The biggest problem with us allowing the situation stated above is that it will soon get to a point that is unsustainable… We want a developmental state and not a failed state.”According to Dr Peter Baur, Associate Professor at the University of Johannesburg School of Economics, a basic income grant is a ‘great initiative’ that is currently without a solid financing plan. He rates the potential of this initiative leading to higher wages as possible but not probable.
“Such an initiative would usually have a very fast measurable impact, such as through economic growth, resulting in creating additional jobs, inciting higher levels of business confidence, and possibly alleviating some of the stress experienced by households experiencing both real poverty and relative poverty. The reality of growing poverty in South Africa is a true catastrophic event.”Youth unemployment is at over 40%, and the rate of those without work under the age of 21 is over 60%.
“The contrast is even more stark when we see vast informal settlements living on the fringes of wealthy neighborhoods. The growth of the informal sector is playing a huge role in taking some of the pressure off government, but the loss of tax income is possibly quite noticeable, ” he argues.But on other side of the coin, are the challenges the government will experience in both finding the capital to spend on the grant, and the impact of inflation which will be accompanied by the initiative.
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