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Media Centre  |  COSATU Press Statements

Reducing Inequality and Poverty - A BIG Solution National Conference

2-3 December 2003, Soweto

The Basic Income Grant Coalition's national conference continued today at Ipelegeng Community Centre in Soweto. The conference brings together civil society organisations, government and business to discuss ways to work together to fight poverty. On t he table is the innovative Basic Income Grant - a proposal to provide all South Africans with the means to survive and develop. Proponents of the grant include organised labour, faith based, HIV/AIDS, youth, aged, children and human rights organisations .

Today's Conference proceedings focused on the practical aspects of financing and delivering the grant, as well as the grant's potential to stimulate economic growth and employment.

Graham Bendell of the Smartcard Society of South Africa demonstrated the smart card technology currently in wide use in South Africa for a variety of applications, including old age pension payments. The technology will be integral to the new Home Affa irs National Identification System (HANIS), which is already being developed by government. HANIS will enable social grants to be paid more quickly and efficiently, whilst introducing new mechanisms to prevent fraud. It would also make the delivery o f a universal income grant feasible at very low administrative costs.

Elroy Paulus of the COSATU Parliamentary Office and and a member of the BIG Financing Reference Group presented the findings of a six-month investigation of potential methods of financing the grant. The research, co-ordinated by Black Sash, brought tog ether four leading economists to agree on a common set of assumptions about the basic income grant to develop a consensus model to assess the implications of various financing options. Although the four economists looked at different tax-based financin g packages, they agreed on several important conclusions, namely:

  • South Africa can afford a Basic Income Grant, and finance the grant without necessitating increased deficit spending;
  • There are a number of feasible financing options for a BIG, each of which has differing redistributive implications;
  • The optimal financing package is likely to involve a mix of revenue sources;
  • The BIG would substantially reduce the poverty gap and would effectively eradicate extreme poverty;
  • The BIG would be developmental.

Selwyn Jehoma, Chief Director: Grants Administration for the Department of Social Development, responded to the morning papers, conceding that he had only recently begun to think about how government could finance and deliver a BIG. He questioned wheth er the administrative costs of a universal grant would be significantly less than means-tested grants, given that there would continue to be a need for people to apply for a universal grant and for applications to be verified.

Conference delegates later attended two parallel sessions on gender and the BIG and the grant's potential impact on people living with HIV/AIDS. Delegates welcomed the news that Zackie Achmat, head of the Treatment Action Campaign, has been nominated f or the 2004 Nobel Peace Prize.

The morning's concluding plenary session focused on Growth, Investment and Inequality. Dr. Neva Magketla, chief economist for COSATU, highlighted the role of economic equality in acting as an obstacle to economic growth. She called for improved social protection in ways that assist people to be economically active. Senator Eduardo Suplicy of Brazil read an open letter to be presented to President Mbeki by the Brazillian Ambassador highlighting the Brazil's progress toward a universal income grant and urging the President to consider a similar option for South Africa. To sustained applause, Senator Suplicy announced that Brazil is on the verge of becoming the first country in the world to implement a Basic Income Grant.

The Conference will conclude this afternoon with sessions on the Basic Income Grant and youth and children, as well as its impact on food security. Delegates will also view the premiere of an eight- minute video on the Basic Income Grant, commissioned b y the BIG Coalition to assist community educators and grassroots organisations to promote popular awareness of the BIG proposal. COSATU President Willie Madisha will make the closing address to conference delegates.

For more information contact: Solange Rosa, Media Coordinator, Children's Institute 084 408 2956 Patrick Craven, Acting COSATU Spokesperson 082 821 7456

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