The Basic Income Grant (BIG) is a monthly grant that would be paid by the state to every person legally resident in South Africa. It would satisfy the constitutional right of access to social security and would form the central pillar of a comprehensive social protection package. The BIG has been endorsed by a government-appointed Committee of Inquiry (the Taylor Committee) as the best way of addressing income poverty. Public works programmes and food vouchers might be other valuable components of a comprehensive social protection package; however, none of these initiatives can have such a wide reach and such a deep, immediate and lasting effect as the BIG, which offers the potential of reducing the poverty gap by three-quarters.

Public Works Programmes

Public Works Programmes (PWPs) are state programmes that employ people to build public infrastructure, such as roads and bridges, or to provide other improvements for the benefit of the public. PWPs are primarily intended to create assets and employment; they do not provide the safety net for vulnerable people that is the aim of the BIG. They therefore serve a very different purpose from the BIG. In the language of the Taylor Commission, the BIG addresses income poverty, whilst PWPs address capability poverty.

Large-scale PWPs are most effective in crisis situations. By their very nature, PWPs do not offer viable long-term employment. They are short-lived and often "relief" oriented, and do not provide access to a permanent source of income for those most in need. Although they can help to develop marketable skills, they should not be seen as a mechanism for long-term employment, but as a corrective intervention when the market is temporarily unable to provide sufficient employment.

Given the depth of our unemployment, if PWPs are to have any lasting impact on employment, they must be sustained for many years. The sheer magnitude of such a task finding projects to tackle and the necessary managers to run such projects is daunting. The effectiveness of such expenditure is questionable when, for roughly the same amount of money, a simpler, more efficient alternative exists: the BIG.

PWPs are expensive to initiate and run. According to the Taylor Committee's findings: "If R300 per month were offered to 2,6 million people, the wage cost of the public work programme would be R9.4 billion per annum. Raising the wage to R400 per month would push this to R12.5 billion. Such programmes are expensive to initiate and run. Estimating the management and materials costs for a project as ambitious as that being discussed (it is one thing to design a scheme and employ a few thousand - it is another matter altogether to do the same with a few million) takes the estimates even further into the realm of speculation. If the costs were between 50 and 100 per cent of the wage cost, the total cost could lie between R14-25 billion annually." (Taylor, p. 74)

Studies have shown that a large percentage of the funds designated for a given PWP never reach those who need it most, as they are spent on salaries of managers, for training and for cost of materials. In addition, PWPs are highly susceptible to corruption.

The reality is that PWP's can only make a dent in the unemployment situation in South Africa at best. Our country faces an extended unemployment rate of close to 40%, with over 7 million jobless, and a growing number of people completely excluded by the labour market. To date, PWP's have created only 20,000 30,000 jobs per year. It is clear that while PWP's can contribute to the fight against poverty, and help with skills transfer and job creation, they are not sustainable in the long term on a large enough scale to have the desired impact.

PWPs create social stigma, labelling those who must work for a PWP as "unable to take care of themselves". This stigma is psychologically draining, which has negative consequences on society as a whole.

PWPs often exacerbate inequities, as the benefit of infrastructure development typically goes to those least in need. Bridges and roads, for example, tend to help most those who can afford cars. In addition, PWPs fail to benefit the poor equally the vast majority of those employed in building infrastructure projects are men, not women, children, the elderly or the infirm. Therefore, PWPs cannot address the problems of a vast part of the poor population.

While PWP's are useful in addressing capability poverty, they must be seen as being supplementary to, and not a replacement for, the BIG that reduces income poverty.

Food Vouchers

While food vouchers are helpful to ensure a certain level of food security to those most in need, they do not have the same capacity to eradicate the root causes of poverty as the BIG does. They do not target income poverty by providing the safety net that is so crucially needed.

Having enough to eat is only one problem faced by the destitute. In addition the poor have particular difficulty accessing health care, basic services and primary education. Many people do not have access to transportation or needed clothing. Food vouchers do not enable the poor to prioritize need and gain the long-term benefits of health, education, and basic services such as transportation, housing, water and sanitation, electricity and communications. The BIG does.

In addition, vouchers do not have any of the intended economic benefits of the BIG they do not have the "springboard" effect on the economy that will aid in economic development or help reduce inequality.

Food vouchers also carry a social stigma that compromises their effectiveness. By removing the stigma that labels the recipient of food vouchers as poor, a universal BIG bolsters economic support without draining psychological resources.

Addressing income poverty is the most fundamental step needed to advance a social protection process. While the BIG directly targets income poverty, food vouchers do not.

The Democratic Alliance Dole

The DA has indicated support for a BIG, but proposes to limit it to those earning R7500 per year. Anyone earning more than R7500 per year who applied for the BIG would have his or her grant taxed by SARS at 20 times its value, effectively cancelling it out. This, they argue, would eliminate the means test and also ensure that those earning over the limit would simply not apply for it.

However, those earning below R27000 per year are not required to file income tax returns. In order to prevent people earning between R7500 and R27000 per year from claiming the grant, the state would have to reintroduce a means test. The BIG Coalition has shown, and the DA agrees, that a means test is detrimental to both the economic development of South Africa and the equitable distribution of social security benefits to all South Africans.

Technically, the DA's proposal is really a "dole", not a BIG, because it fixes an income level (R625 a month) above which people cease to benefit from the grant. According to the DA plan, someone who earns R600 per month and has five dependants would have a total household income R1260 per month (R600 plus a BIG of R660). A similar household where the breadwinner earns R650 a month (R25 more than the DA's arbitrary means test) would not benefit from the grant and therefore neither would his or her dependants. In fact, the second household would be R10 better off each month if the breadwinner quit his or her job and started claiming the DA Dole.

The BIG is the best choice

A universal, non-means tested BIG is a crucial first step toward eliminating destitution. It avoids the disincentives to work inherent in means-tested social assistance programmes. It brings all South Africans within the social security net. It facilitates risk taking and self-reliance, and can therefore be a springboard for development and employment.

PWPs, food vouchers, and other programmes can be helpful complements to the BIG, but should not be seen as replacements for it.