Basic Income and BEE are mutually exclusive

If we want to talk basic income, the place to start is the BEE scorecard. You cannot have a system that creates elite access to the economy operating alongside one that tries to facilitate fair access. The two policies are mutually exclusive.

But, like most things, the ANC has managed to appropriate and destroy the term ‘basic income’. The term ‘basic income’ is now used interchangeably. It refers to: a basic income grant; and targeted, means-tested, poverty-alleviation cash transfers aimed at adults. This might seem insignificant at first, but the consequences are profound.

This has resulted in basic income becoming synonymous with the ANC; a very small handout given to the poor and paid by the taxpayer. It is a policy which is unpopular among the poor who prefer a decent job. It is despised by those who work hard but who see very little of their tax money – and instead witness the lavish lifestyles of a few corrupt political and business elite individuals.

This distorted version of ‘basic income’ will bankrupt the country, destroy the last of the middle class and condemn the rest of us to a life of violence and poverty, as we are governed by increasingly authoritarian, chauvinistic leaders.

It is a tragic state of affairs because we are actually faced with only two policy options: A basic income grant paid as a rightful share of the economy, or increasing mayhem and asset confiscation.

The only solution now is to rename and reframe ‘basic income’ to ensure a clear understanding among business individuals and ordinary South Africans across the race and class divide. People need to understand why an authentic basic income grant, in contrast to a poverty-alleviation grant, can actually change the socio-economic trajectory of South Africa.

This said, the concept of basic income will only work if it is financed through an appropriate mechanism. If it is financed by workers in the form of increased taxes and cuts to service delivery budgets – as with current poverty alleviation grants – its impact will be disastrous. However, our most comprehensive and powerful policy, the BEE scorecard, can be used as a lever to finance a basic income grant. It is the logical place to start because it will change the way money is distributed: away from a few corrupt political and economically elite individuals, and into the hands of ordinary South Africans.

The whole point of a basic income is this: to change the way money is distributed in a society. To create a fair economy with a financial floor that provides everyone with the confidence and ability to choose how to combine different income streams – in a context where wage labour is no longer the norm. In contrast, a poverty alleviation grant is aimed at alleviating the worst forms of poverty and staves off hunger and starvation. It is a safety net for individuals who are perceived to have failed in the economy, where wage work is the norm.

Big companies (excluding SMMEs) should be given the option of transferring money to a fund that can directly distribute cash to ordinary South Africans, so that the companies can be 100% compliant. Such a scorecard model meets the criteria of certainty, clarity and simplicity – all of which investors like. It also equates to two transactions and no ‘middleman/business/trickle-down empowerment’.

Streamlining the scorecard into a straightforward, simple system that nobody can rig will result in massive savings at various levels. This will result in the ability to pay a basic income that is basic but meaningful – hence the emphasis on the upper-bound-poverty line. This is an objective measure which can protect the policy intention of the grant. It is also becoming an electioneering tool for populist leaders. Most importantly, it can act as an economic stimulus by facilitating inclusive growth. The financial value is high enough to allow people to spend on more than just food. This creates demand for local goods and services – so growing the economy from the bottom up. This is
impossible with an amount of R350 or even the mooted R500.

Basic income can use age but never income to determine who gets the money and who does not.
This allows ‘poverty traps’ to be avoided. Low-paying and often insecure jobs become more attractive because recipients can combine their salary with the grant. People do not have to fear that their small but reliable grant will be taken away from them the moment they take on a job that may only last a few months.
This also promotes decent work. Recipients can take a low paying job to supplement their income while they look for something better. But they can also say ‘no’ to a degrading job because they have actually some money in their pocket. They can look for training and job opportunities in line with their talents and skills, rather than do whatever is needed to survive or what is required of them by the state. This is not the case with poverty alleviation grants. Poverty alleviation grants are taken away under certain conditions and are often linked to certain requirements. For example, participation in state-funded training and employment or exit programmes. The latter come at great cost to the taxpayer and do not lift people out of poverty. Furthermore, their distribution is often used as a political tool to secure political support in rural areas.

A basic income grant can be a game changer for South Africa. However, we must go about implementation and conceptualisation in the right way. Rightful Share, as I like to call it, is pro-growth, pro-business and pro-ordinary South Africans. Efforts must now be directed at mobilising support from business and the public at large. This requires a distinctive approach, new language and a clear distancing from government’s mooted low-level social assistance grant for unemployed South Africans. We need to stop complaining and should focus on a campaign that speaks to ordinary South Africans across the race and class divide.

It is imperative to vote for leaders that understand and appreciate what a basic income grant really is, to form coalitions around it or establish a new party that promotes it. South Africa has run out of time.

Karen Jooste
Founder RightfulShare an Income Movement