COSATU welcomes Zola Skweyiya's BIG statement 09 - 11 - 06

COSATU welcomes Zola Skweyiya’s BIG statement

The Congress of South African Trade Unions welcomes and applauds the statement by Social Development Minister Zola Skweyiya in support of a basic income grant (BIG).

Although he was speaking in a personal capacity, Zola Skweyiya is a highly respected and authoritative figure in the ANC and the government, whose views must be taken very seriously. His department is in the front-line of the war against poverty. He and his officials see every day the desperate plight of the estimated 23-million people living in poverty in South Africa, including the approximately 10 million poor people who do not qualify for the existing grants and old-age pensions which he administers.

His statement will give these people a ray of hope that their lives will soon be improved. COSATU hopes it will set in motion an unstoppable groundswell of support for the idea of a BIG in the build-up to next year’s ANC National Policy Conference. COSATU will therefore engage as a matter of urgency with the Minister and in the Alliance to see how this debate can be taken forward in a concrete way.

It is nearly 5 years since the Taylor Committee recommended the introduction of a BIG. The BIG Coalition, which unites COSATU with eleven other representative organisations including the South African Council of Churches, SANGOCO and the Black Sash, has been arguing that the greatest threat to South Africa's new democracy is the unacceptable levels of poverty and inequality, which make South Africa the most economically unequal nation on earth.

The South African Constitution imposes an obligation on the state to guarantee social security for all, "including, if they are unable to support themselves and their dependants, appropriate social assistance." And the Constitutional Court has affirmed that the State is under a duty to provide immediate relief to people who are in desperate need and living in intolerable conditions.

The BIG would be an important way to give effect to these constitutional obligations. It would combat poverty, provide everyone with a minimum level of income, enable the nation's poorest households to better meet their basic needs, stimulate equitable economic development, promote family and community stability, and affirm and support the inherent dignity of all.

The present social grants system, despite some improvements, fails to meet the basic needs of the majority of South Africans. In very many households, old age pensions and child grants are the only source of income, but leave too many other poor people, like unemployed people with no young children, with nothing.

Since everyone would receive the BIG, it could alleviate poverty far more effectively than extensions to the present grants. Even a R100 monthly BIG would nearly triple the average per capita transfer to poor households, and thereby reduce the poverty gap by more than 80%. It would double the amount available for consumption by people in the poorest 29% of the population.

Also, by providing a universal, stable and reliable source of income, BIG would help people to plan their economic activities better and increase spending on locally produced goods and locally delivered services. This would boost local markets and stimulate job creation, particularly in rural areas, where it could kick-start the local economy.

UN studies have shown that poverty undermines social investment. Poor child nutrition, for example, creates long-term health problems which lead to higher medical costs, poorer educational performance, lower labour productivity and increased absenteeism. BIG could be a big help in the national campaign to combat the scourge of HIV/Aids, which hits the poorest communities hardest.

COSATU and its partners reject the argument, advanced in particular by Finance Minister Trevor Manuel, that BIG would foster a ‘dependency culture’. Of course creating many more quality jobs is the key to ending poverty permanently and nothing should stand in the way of that goal. But at the level of payment being envisaged, no one would give up the chance of a job in order to live solely on the BIG. If jobs pay less than the BIG, it means the wages are way below the minimum levels laid down in sectoral determinations. If the BIG has the effect of forcing up wages to the legal minimum, that can only be for the benefit of all.

The Coalition also rejects Manuel’s view that the BIG is unaffordable, and have commissioned detailed studies to prove that this is not so. We would argue that we cannot afford not to spend a modest proportion of our national wealth in the best possible way – to end poverty and save lives.