Despite numerous promises made by the African National Congress-led government to create jobs and grow the economy, it is increasingly becoming evident that the South African government does not care about the poor. The current budget speech and previous neoliberal government policies have turned a blind eye on the demands of the poor.
In the midst of an unemployment crisis, where 70% of young people are unemployed, Finance Minister Enoch Godongwana used the budget to redistribute the proceeds of windfall commodity gains to business and to the employed. Corporate taxes were reduced by 1% while personal income taxes were raised by 4.5%. The Minister also declared that Social Relief of Distress Grants and calls for a Basic Income Grant are significant risks to the fiscal framework “that exceed available resources.”
The recently made budget announcement appeased the captains of the industry while transferring more economic burdens on to the poor. It put profits before people with its substantial continuation of trickle-down economics. Corporations are not being held accountable for their lack of job creation. At the same time, government allows these entities to take money out of the country illicitly which reduces government revenue and the ability to address the social needs of the people.
Inequality in South Africa is worse in comparison to many other developing countries. The South African government continues to turn a blind eye to the gross unequal distribution of wealth in South Africa. In this context of economic decline, the suffering of the poor is escalating. Lack of decent housing, poor infrastructure, lack of access to water and sanitation, poor health services and the unpaid labor of women in the care economy are a few examples of the devastating conditions many South Africans are forced to grapple with. Given the ongoing economic and social pressures on the larger South African population, it is almost inevitable that we will see more food riots like one in July 2021 in KwaZulu Natal and in other parts of the country.
It is for these reasons that organisations, trade unions and social movements of the poor and working-class communities, including Fight Inequality Alliance South Africa, are demanding for social relief in the form of a Basic Income Grant (BIG) of 1500 Rands per month, for the unemployed and precarious workers. The Social Relief of Distress Grant (SRD) of 350 Rands (about 23 USD) per month was extended to March 2023. However, this amount is not enough to support the basic needs of the poor.
A Basic Income Grant in the hands of the poor will provide basic needs for the poor while at the same time fueling further economic growth. Spending this grant in the South
African economy could stimulate job creation and contribute substantially to the government’s fiscus, through tax systems. Above all, a BIG will restore dignity to the poor and working-class masses.
Unfortunately, austerity measures continue to prevail, furthering crises of poverty and inequality in South Africa. The poor carry the brunt of this burden. The budget should have increased the value of social grants to lower poverty lines and introduced a Basic Income grant. It should have reduced the tax burden on the poor and created a conducive environment for jobs to be created.