The Basic Income Grant Coalition welcomes the Consolidated Report of the Committee of Inquiry into a Comprehensive Social Security System for South Africa (also known as the Taylor Committee), which was released by the Minister of Social Development on 2 May 2002. We commend the Taylor Committee for its diligence in compiling a concise, wide-ranging and well-researched report. We appreciate especially the range of expertise on which the Committee drew, its openness to input from civil society, and the collegial manner in which Committee members approached their task. We also applaud the government for publishing this document and for inviting public comment on it.

The success of South Africa's transition to democracy and the dismantling of apartheid will ultimately be judged by our capacity to address apartheid's legacies of poverty, inequality and underdevelopment. As the Reconstruction and Development Programme observed: "No political democracy can survive and flourish if the mass of our people remains in poverty, without land, without tangible prospects for a better life. Attacking poverty and deprivation must therefore be the first priority of our democratic Government."

For this reason, the publication of the Taylor Committee report represents one of the most revolutionary events in the life of our nation since the first democratic elections in 1994. It marks a critical moment in the humanisation of South African society. Having completed much of the legislative reform necessary to ensure that all South Africans have the right to be free, we must now make certain that everyone has the means to be free. The appointment of the Taylor Committee demonstrated the government's commitment to satisfying everyone's constitutional right to social security, including appropriate social assistance [sec. 27(1)(c)]. Now we must ensure that the recommendations of this expert panel are debated, refined and implemented.

We therefore call on all stakeholders to recognise the importance of this document, to review it carefully, to interrogate its recommendations thoroughly, and to ensure that it becomes the catalyst to the formulation of a national social protection policy that will ultimately enable the government to effectively meet its constitutional obligations to provide social security to all our people. We hope that, in addition to the comment period announced by the Minister, legislative committees at the national and provincial levels will also encourage popular debate on social protection by holding public hearings on the report's recommendation.

Given the complexity of the topic and the number of issues raised in the report, our comments today constitute a very preliminary response to the document. The members of the campaign are committed to discussing the recommendations in greater detail in their respective constituencies and reserve the right to present more nuanced positions at a later date. However, we believe that there are a number of clear messages that emerge strongly from the report, many of which support what the Coalition has been saying for the past year. We want to take this opportunity to highlight these points.

First: We endorse the Committee's call for the creation of a comprehensive social protection package that addresses not only income poverty, but also capabilities poverty, asset poverty and special needs. Although South Africa, as a nation, is comparatively affluent, apartheid created enormous disparities in wealth and income, leaving the vast majority of the population profoundly impoverished. We are therefore in the unique situation of having both an acute need for a comprehensive social protection package and sufficient resources to finance it. Given the platform of the Basic Income Grant Coalition, our comments will focus primarily on the Committee's finding and recommendations with respect to income poverty. However, we agree with the Committee that income transfers alone are not a panacea for poverty. They must instead be embedded in a wider system of social protection.

Second: The report concludes that income transfers are the best starting point for rooting out poverty. The Committee expressed the view "that one of the most effective means of reducing destitution and poverty is to provide some minimum support in the form of a Social Assistance Grant." (p. 60) While they noted that government programmes to enhance access to land, health care, education, housing, etc. were "well conceived and potentially well targeted," poor households continue to find it difficult to take advantage of these initiatives "because they do not even have the most basic income for transport, food and basic clothing." (p. 55 - 56) Providing a minimal level of income support can enhance the impact of other anti-poverty programmes by increasing the rate of take-up. Furthermore, measures to address income poverty are "easier to rollout in the short term" and could allow "the state to buy time for progressive realisation of its other socio-economic" obligations. (p. 43)

Third: The Committee found that the patchwork of social grants inherited from the apartheid era is inadequate to meet the challenge of stamping out extreme poverty. There are enormous gaps in the system. Even in a system designed primarily to protect children and pensioners, seventy-five per cent of poor children under the age of seven (and all older children) do not receive the child support grant. Meanwhile, 60 per cent of the poor - 11 million people, including the working poor - receive no transfers at all. (p. 31) Furthermore, research done for the Committee found that, even with full take-up of all social security programmes currently on offer, roughly 22 million people would still fall below the poverty line. (p. 59)

Fourth: The Committee determined that means testing is an ineffective way of targeting social grants. Currently, the poorest ten percent of households receive the smallest share of income transfers in spite of means-testing. (p. 25) Means tests decrease the accessibility of social grants for the very poor, who often lack awareness of the availability of such schemes or the resources to negotiate a complicated application process. In addition, means tested grants typically create "welfare traps" by penalising efforts to find employment.

Fifth: The report acknowledges that the South African economy is unlikely to be able to offer jobs (whether formal or informal) for all in the foreseeable future. South Africa faces a labour surplus coupled with a high skills deficit resulting in long-term structural unemployment. In this situation, a welfare system premised on the notion of "tiding people over" until they find employment is inappropriate and poorly suited to reducing poverty.

In light of these findings, the Committee lends support to the introduction of a universal Basic Income Grant of R100 per person per month. "Analysis indicates that the Basic Income Grant has the potential, more than any other possible social protection intervention, to reduce poverty and promote human development and sustainable livelihoods." (p. 62) It is also the best option for children because it diminishes the pressure to stretch child support grants to meet the needs of an entire family. Research has shown that increased household income is strongly correlated with improvements in children's well-being.

A universal grant would better target the poor, assuming the grant is recovered from more affluent people through taxation. It would also be cheaper and simpler to administer than a means tested grant, with less risk of the corruption or mismanagement that has often beset discretionary grants. It would make an important contribution to the fight against HIV/AIDS by enabling people living with HIV to maintain better levels of nutrition and health. Unlike a "dole" system that discourages people from developing other sources of income, the grant would combat the dependency of poverty, giving everyone a small amount of money on a regular basis to enable planning, risk taking and self-reliance.

The Committee argued strongly that South Africa can afford a Basic Income Grant. Reviewing the financial implications of the comprehensive social protection package it outlines, the Committee concludes: "The reform path assessed is affordable when seen from a long term perspective, as all improvements in the social security system occur broadly within current macro-economic constraints. No significant changes in the proportion of GDP allocated to social security are required if these scenarios are to be implemented. In particular, the implementation of a universal system of social assistance grants in key areas becomes both feasible and affordable. Importantly, the restructured Social Security System removes gaps in coverage that exist in the present without changing the overall proportion of GDP used." (p. 149)

Current estimates indicate that the net cost to the government of a Basic Income Grant would be something in the vicinity of R20-24 billion per year, before implementation of a solidarity tax. Over the last five years, the government has approved tax cuts resulting in the loss to the fiscus of close to R50 billion per year. It is time to stop making big gifts to the rich and to start making BIG grants to the poor.

While the resources for a Basic Income Grant are available now, the delivery infrastructure would still need to be identified and put into place. Consequently, the Taylor Committee proposes a phased approach to the establishment of a comprehensive social protection system. This would involve in the first phase the extension of the child support grant to all children (i.e., to the age of 18) and would require the elimination of the means test. The Coalition acknowledges the practicality of a phased approach, provided it is based on the principle of universality and abolition of the means test; members must still discuss the details of the Committee phasing proposals within their constituencies.

The litmus test of any society is the manner in which it cares for its most vulnerable members. The Taylor Committee has articulated an attainable vision of a comprehensive social protection package that can weave a tighter and stronger social safety net for all South Africans. The Basic Income Grant is a central pillar of this package. The national debate on social security should no longer be focused on whether we implement a Basic Income Grant, but rather on how we do so.

The above statement was released by the Basic Income Grant Coalition at a parliamentary press briefing in Cape Town on 16 May 2002. The panelists at the briefing were:
Edwin Arrison - Anglican Diocese of Cape Town (Social Development office: 021 465 1557)
Neil Coleman - COSATU Parliamentary Office (021 461 3835)
Teresa Guthrie - Alliance for Children's Entitlement to Social Security (021 685 4053)
Nonkosi Khumalo - Treatment Action Campaign (021 788 3507)
Sandra Liebenberg - Community Law Centre, University of the Western Cape (021 959 3708)
Hilary Morris - Black Sash (021 461 7818)
Douglas Tilton - SACC Parliamentary Office (021 423 4261)