Why South Africa needs to ensure income security beyond the pandemic

Hannah Dawson and Elizaveta Fouksman write on the COVID-19 Special Relief Grant and income security in The Conversation. You can read the full article here

Dawson was interviewed by Joanne Joseph on radio 702.

A slew of countries ranging from the US to Brazil to Singapore to South Africa have decided to give people money in response to the economic crisis caused by the coronavirus pandemic.

While the amounts and details of the grants have varied, these governments have all made it clear that such payments are a short-term emergency response to an exceptional situation. But is the economic uncertainty caused by COVID-19 as exceptional as it seems? Might the reasons for guaranteeing economic security be valid even without a global pandemic?

Take the case of South Africa.

The government has decided to substantially bolster the social security net, directing R50 billion to those most acutely affected by the crisis over the next six months. This will be distributed in the form of increasing the current child support grant. In addition, pensions and disability grants will go up. But the biggest change is the introduction of a special “COVID-19 Social Relief of Distress grant” to be paid to people who are currently unemployed and do not receive any social grant or unemployment insurance for the next six months.

The new COVID-19 grant is the first time unemployed working-age adults are being included in the social grant system. Since 1994, the African National Congress government has resisted including them. And the resistance remains.

South Africa’s treasury has been busy making it clear that the new direct cash transfers are exceptional and temporary. At a recent media briefing, finance minister Tito Mboweni repeated again and again that the additional grants were temporary. His anxiety that people will expect the additional grants to remain in place – and that they will become “agitated” when the grants are taken away – is palpable.

Economic distress – before the pandemic

The name of the new grant shows exactly what it’s meant for. Calling it the COVID-19 Social Relief of Distress grant makes it clear that this is an emergency measure, here only to relieve the distress of COVID-19.

But economic distress was the norm for many before the coronavirus outbreak. Illness, ill-fortune and economic precarity existed long before this pandemic. The outbreak only makes the economic crisis broader, deeper and more visible.

An accident, a family death, or a delayed train can happen to anyone. But for the large number of people in South Africa who work for low wages without a proper contract, or who simply cannot find work at all, one of these events can be the tipping point into destitution.

They don’t need a pandemic to experience economic distress.

We would argue that South Africa needs more than emergency provisions such as a short-term new social grant or an emergency basic income. Rather, it needs a permanent form of economic security, be it in the form of a universal basic income that is given to all and then taxed back from those that don’t need it, or some other form of income guarantee for all. READ MORE

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