The Department of Social Development (DSD) confirmed that further internal consultations, particularly with the National Treasury, are necessary to address concerns regarding affordability and integration with employment strategies. This decision follows extensive nationwide consultations on a BIS discussion document.
Internal Disagreements Stall Policy Progress
A draft policy, intended for Cabinet approval and public consultation by October 2024, revealed ongoing disagreements when presented to the Social Protection, Community and Human Development (SPCHD) Cabinet Committee in November 2024.
The Committee called for further consultation with internal stakeholders, specifically the National Treasury, on the affordability of the provision and its links to employment opportunities.
The delay stems from a lack of consensus on the economic modelling that supports the BIS's affordability, a point of contention between the DSD and the National Treasury.
Social Relief of Distress Grant Extended as Interim Measure
While BIS consultations continue, reports indicate the government will extend the Social Relief of Distress (SRD) Grant for an additional 12 months. Leaked budget documents suggest the grant, initially set to conclude in March 2025, will continue to support unemployed individuals until 2026.
This extension aims to provide a safety net while the BIS policy is finalised.
Historical Context and Expert Recommendations
The concept of a Basic Income Grant in South Africa originated at the 1998 Presidential Jobs Summit, leading to the 2002 Taylor Committee report, which recommended a R100 per person BIG. Following nearly two decades of inactivity, the DSD commissioned a study in 2021 to assess the impact of a BIG.
Experts recommended a gradual introduction, starting with a benefit value aligned with the Lower Bound Poverty Line, integrated into the broader social assistance framework.
Research Highlights Potential of SRD Grant and Progressive Taxation
A 2022 commission focused on financing strategies and the impact on poverty, inequality, and economic sectors. Findings suggested the SRD Grant, if adequately funded, offers significant income redistribution potential.
The study indicated that progressive taxation, such as personal income tax, can improve income distribution and stimulate economic output more effectively than value-added tax.
The commission also highlighted the benefits of combining social grants with targeted wage subsidies to foster inclusive growth, while emphasizing that government-subsidised employment programmes should complement, not replace, income protection measures.
