The Committee emphasises that decisive interventions to address income poverty can make a major impact in the short to medium term: "Income poverty measures are easier to roll out in the short term than more infrastructural and institutional intensive ‘capabilities’ and ‘asset’ poverty programmes." It is therefore critical to expedite such interventions.

The BIG Coalition wholeheartedly supports the overarching approach on Comprehensive Social Protection adopted by the Committee as being appropriate to the challenges confronting our country, particularly in relation to the crisis of poverty and inequality. We agree that measures taken to address income poverty will be most effective if they are linked to efforts to combat other forms of poverty. It is in this context that our detailed comments on the proposals relating to the Basic Income Grant need to be situated.


4. ASPECTS OF IMPLEMENTATION

4.1 A phased approach to implementation

The Committee identifies three options in relation to addressing income poverty. These are:
Option 1- maintain the status quo;
Option 2- immediate implementation of comprehensive social protection;
Option 3- phased implementation of comprehensive social protection.

The Committee rejects Option 1 on the grounds that such an approach would be unconstitutional, that inadequate social protection will inter alia contribute to social instability, and that the country will ultimately have to bear the costs of not acting.

The Committee takes the view that Option 2 is not immediately feasible on the basis that time is required to set up the necessary institutional arrangements to implement comprehensive social protection.

It therefore proposes Option 3 – that comprehensive social protection is implemented in distinct phases. Specifically in relation to BIG, the Committee recommends that it be implemented progressively in two phases. The first phase, 2002 to 2004, would rationalise and dramatically extend the existing system of grants, giving priority to "the most vulnerable, namely children up to the age of 18". In this phase the Committee proposes inter alia establishing a universal Child Support Grant for children under 18, as a key stepping stone for the introduction of a comprehensive BIG, or ‘solidarity grant’. Beginning in 2005/2006, an income support grant would then be extended to all South Africans.

The BIG Coalition acknowledges that substantial groundwork must be done before a BIG can be effectively implemented. Provided that there is a clear commitment to the introduction of a BIG, complete with viable deadlines, we would support a phased approach. If South Africa is to meet its Millennium Development Goals of eradicating absolute poverty by 2015, the BIG must be put in place early enough to allow any major delivery bottlenecks to be resolved in time. A more detailed implementation plan should therefore identify clear interim targets to ensure this timetable can be met.

4.2 Extension of grants to children in the first phase

Read with other sections of the report, the Recommendations in Chapter 5 clearly suggest that the intention of the Committee is to introduce a universal child support grant to children under the age of 18, during this first phase.

Nevertheless, the section of the Committee’s report dealing with Phase One lacks some precision. It calls on government to "simplify and eliminate the means test" – it is not clear for which grants the Committee wants to remove the means test (e.g., the Child Support Grant) and for which it wants to simplify the means test (e.g., the Old Age Pension). This has invited various interpretations of the Committee’s intent, and together with other vague statements in the Report, created unnecessary ambiguity. However, the report states unequivocally: "The Committee believes that the most efficient, developmentally most effective and fairest way forward is to abolish all means tests and to cover the costs through increases in tax."

The Committee rightly recognises the need to prioritise the social protection of children, but there are choices that must be made about how income support grants are extended to children. It is important for Cabinet to keep in mind the state's constitutional and international obligations when it decides on the exact nature of the implementation strategy, the timeframes and the amount of resources that will be allocated to ensuring that all children can access the grants in the short to medium term, particularly within the period proposed for the first phase.

In March, the Department of Social Development reported that 3.6 million children under the age of seven were eligible for the Child Support Grant (CSG). The extension of the CSG to seven- and eight-year-olds from this year has increased the Department's overall target by 930,000 children. To date, roughly 2.7 million children have been registered – a shortfall of 1.8 million. More important, the Department's targets are based not on estimates of the total number of children under the age of nine living in poverty, but rather on the number of poor children that the Department believes it has the capacity to reach. The actual number of children under nine in need may be more than 1 million larger than the current target, depending on the poverty line used.

Given the Committee’s findings with regard to poverty and the gross inadequacy of the current social security system, the state will need to greatly improve the uptake of the child support grant – well beyond its original targets – in order to avoid a constitutional challenge and to fulfil the country's obligations in terms of the Convention on the Rights of the Child. If this goal is to be achieved, far more resources must be allocated to ensuring that children can access the child support grant.

Furthermore, the government’s implementation strategy will determine the likely improvement in the take up rate. Retaining the means test and gradually increasing the age limitation would complicate administration and unnecessarily impede both take-up and delivery. Research has shown that the means test frequently prevents the poorest and most vulnerable households from accessing social grants. It is a tragic irony that the very mechanism that is meant to "target" grants to poor communities actually denies benefits to the most needy. This approach could even give rise to constitutional challenges based on unfair discrimination. On the other hand, abolishing the means test and making the grant available to all children under 18, as is proposed by the Committee, would be the most effective way of reaching all children in need.

The BIG Coalition therefore strongly endorses the universal extension of the CSG in the first phase to all children under 18, with effect from 2004. Moreover, we believe that this approach is entirely consistent with the logic of the Committee’s report, given its repeated emphasis on the role of means testing in preventing the neediest households from accessing social grants.

The idea of comprehensive social protection – and specifically a BIG – requires a new way of processing grants, one that is administratively less cumbersome. We must confront this challenge as quickly and as vigorously as possible to permit the design and implementation of an effective system. Further research and analysis is required to identify existing barriers to the delivery of the CSG and to eliminate these obstacles. The implementation of the extended CSG will provide valuable research and operational data that will lay the foundation for the introduction of the BIG to all adults and children in South Africa.

This will also be an opportunity to resolve financing issues. The extension of the CSG to all children under 18 should be accompanied by mechanisms to recover the grant from more affluent households through the tax system. This will not only enhance the affordability of the grant, it will also promote a more equitable distribution of income.

We submit that a period of three years is more than adequate as a preparatory phase and that a universal BIG should be in place by 2007 at the latest. We believe that this is the ultimately the best way of ensuring that children’s social security needs are reliably and sustainably prioritised.



4.3 Preparations for the phasing in of the BIG

Phase One must also be used to identify and address obstacles to the roll-out of the BIG so that government will be ready to launch the grant by 2007. The period 2003 –2006 must be used to put in place the institutional measures and processes necessary for the smooth administration of the BIG. This includes the registration of both adults and children, which is essential not only for social development but also for the efficient functioning of the Department of Home Affairs. Registration is a right of citizenship. The BIG Coalition is especially concerned by the lack of attention given to the fact that many South Africans, especially in poorer communities, do not have identity documents or birth certificates. Without identity documents, they cannot access many of the various components of the social security package; free water; education; grants etc. Well managed and resourced campaigns to register people, especially in rural areas, must be initiated as an urgent priority.

Money has been already allocated for universal voter registration, which requires potential voters to hold a current identity document. With minimal additional effort and expenditure, this could be the basis for a universal registration campaign, to include children and other non-voters. Such a drive would also assist Home Affairs to complete its electronic Documentation Management System (e-DMS) and Automated Fingerprint Identification System (AFIS). These two databases will make possible the new Home Affairs National Identification System (HANIS). This "smart card" based identification system is expected to offer the most cost-effective platform for the future administration and delivery of social grants.

During the initial phase, government will also need to extend its Post Bank infrastructure, and negotiate with other potential delivery agents to develop a reliable payment infrastructure. Education and training programmes will need to be developed and implemented to inform both civil servants and the general public about the grant, its administration and its responsible use. Existing inter-departmental forums -- such as the social cluster and the DG’s forum -- should identify aspects of implementation requiring interdepartmental co-operation and develop appropriate procedures to deal with these matters.

These processes can and must happen concurrently if we are to meet our commitments in terms of the United Nations Millennium Declaration to eradicate extreme poverty by 2015. It will take some time for the developmental impact of this programme to be felt, and there will inevitably be technical issues to resolve.

4.4 The Fiscal Impact

The Committee does not fully assess the fiscal impact of the BIG as it had no mandate to consider changes to the tax structure. However, a number of studies have demonstrated the feasibility and affordability of financing a BIG through progressive taxation. Research commissioned by the Committee, for instance, showed that the net cost of the BIG is less than R24 billion -- an amount roughly equal to the income tax cuts of the past two years. Fiscal impact analysis suggests that South Africa’s tax structure can afford the cost of the grant without undermining the country’s international competitiveness.

In evaluating the affordability of a BIG, it is important to distinguish between gross and net costs. Gross costs include the cost of grants paid to people who in turn repay it through higher taxes. The net cost is the amount of transfers to the poor and near poor that are actually retained for increased consumption by the grant recipients. With an estimated South African population in March 2001 of 44.9 million people, of which 8.4 million people are eligible for existing social security programmes, a basic income grant of R100 per month would result in a gross cost of R43.8 billion. Of this amount, R22.2 billion would go to households in the top three income quintiles (i.e., the wealthiest 60 percent of households). Adjustments to the income tax structure, for example, can reclaim most of these transfers without significantly affecting the vertical equity of the net tax burden. Adjusting the tax rates and income thresholds at lower income levels gradually recuperates the grant from middle and upper income earners. The value-added tax, in turn, recovers a significant portion of the expenditure associated with the net transfers. Micro-simulations of various tax adjustment options yield an average recuperation of R16.7 billion through the income tax, and R3.3 billion through the value added tax. As a result, the net cost of the BIG is estimated at R23.9 billion.

South Africa currently collects a relatively small percentage of national income through taxation. A survey recently published by EPRI found that, in comparison with other developing countries, South Africa collects up to seven percent of national income (or R70 billion) less than would be expected given the nation’s economic characteristics. This analysis corroborates the findings of research conducted by other institutions. South Africa ranks as the fifth most under-taxed developing country, using EPRI's tax capacity measure. Financing the BIG only requires a tax increase equal to about two percent of national income. This is clearly affordable.

Using the tax system to finance BIG raises a further consideration for a phased approach to implementation. When the BIG is introduced in the second phase (from 2006/2007), it will be necessary to extend access to all eligible people at once in order to justify the associated tax increases.

Comprehensive social security reform will generate both developmental growth and fiscal dividends, making the BIG increasingly affordable in the long term. Growth has two effects on the fiscal impact of the BIG. First, it raises overall national income, and thus expands the capacity of the economy to support fiscal expenditure. Second, as lower income households realise the benefits of the BIG and begin to improve their living standards and income levels, they will be able to keep less and less of the BIG. This lowers the overall net cost of the grant over time. The fiscal dividend results from the BIG's capacity to promote more efficient delivery of social services. Higher living standards raise the efficiency of the educational system, reducing the repeat rate and thus economising on educational resources. Improved nutrition raises lifetime health levels, reducing the strain on the public health system. The medium-to-long term impact of the BIG is likely to reduce the cost pressure on several social sectors, resulting in a reduction in the net fiscal impact of the grant.

The BIG represents a substantial commitment of fiscal resources. However, a well-managed programme is affordable and consistent with fiscal responsibility. South Africa’s tax structure has the potential to finance the entire cost of the programme without recourse to deficit spending. The long-term growth implications of the developmental impact further support macroeconomic stability and fiscal affordability.


5. COMMON OBJECTIONS AND ALTERNATIVES

In the period since the publication of the Committee of Inquiry’s Report, critics of the BIG have articulated three main objections to the grant:
The grant is unaffordable – Those who argue that the grant is unaffordable often confuse the gross and net costs of the grant. Although the nominal cost of providing R100 per month to all in South Africa is likely to be in excess of R50 billion, much of this outlay will be almost immediately recovered from more affluent recipients through taxation. In contrast, the net cost of the grant – the additional fiscal burden on the state – is expected to be about R24 billion. This is considerably less than the amount of revenue foregone in tax cuts: the cumulative effect of tax breaks over the last 5 years is substantially more than the amount required to finance the BIG on an annual basis. We have already dealt with the fiscal impact of the grant above.
The grant is undeliverable – Some critics claim that there are insurmountable technical and logistical obstacles to the delivery of a universal grant. However, the existing grant administration system demonstrates that the government is capable of establishing and operating a national distribution system, and the abolition of means testing will enormously simplify delivery. The impending introduction of new "smart" identity cards will provide an additional delivery channel that appears to be well-suited to the provision of a universal grant. Indeed, the government is already making plans to use the cards to deliver social grants. Although a number of important issues related to delivery require further investigation and discussion, these are not insurmountable provided there is sufficient political will to resolve them.
The grant will foster dependency – This has become one of the most common and persistent objections to the BIG. In fact, it seems to encapsulate a number of distinct concerns that must be disentangled and addressed separately. The remainder of this section examines this argument in greater depth.


5.1 Unpacking "dependency" objections

The objection that the BIG will encourage dependency is usually based on one of three main types of concerns (or a combination thereof):

Reliance on Others

Some critics are afraid that the grant will make people reliant on others, rather than on their own resources. But this ignores the fact that we all rely on others. Those who are fortunate enough to be employed rely on their employers and those who are unemployed rely on their employed relatives. For how long would most of us be able to avoid poverty if we were to lose our source of income?

It is poverty – lack of independent access to income and assets – that makes people reliant on others. Poverty is the most inescapable form of dependence. If this is the concern, a Basic Income Grant can only decrease dependency.

As the Committee of Inquiry’s report points out, in our current system the destitute typically rely on family members, friends and neighbours who are frequently poor themselves. In a society where there is massive wealth and massive inequality, it would make more sense for very rich to transfer resources to the very poor so that they are able to engage in economic activity, thereby lessening their dependence. Achieving this requires state intervention. A BIG, financed via progressive tax rates, would redistribute wealth and alter the ties of dependence that currently shackle the working poor.

Furthermore, there is evidence to suggest that a Basic Income Grant would make the poor more self-reliant in other ways. Research has found that success in job seeking is strongly correlated with income: as income rises, people are more likely to look for work and more likely to find it. Even a small stable income enables poor households to take the sort of risks inherent in job seeking and entrepreneurship.

Moral Hazards

Often, concerns about dependency are premised on the notion that a grant will encourage immoral or economically undesirable behaviour. This objection has several variants. Sometimes the fear is that a grant will make people lazy. If people can survive on grants, what incentive is there for them to work or to contribute to the economy of the country in any other way? This has been a persistent criticism of welfare programmes in the industrial North.

But there are two crucial differences between a BIG and these type of "dole" schemes. First, welfare schemes in rich countries have been able to give people comparatively large grants, allowing beneficiaries to maintain an acceptable, if not comfortable, standard of living without working. Second, dole schemes are typically means-tested. Applicants are only eligible to receive benefits if their income from other sources is below a certain amount. If you know that you are going to lose your dole payment if you manage to find work or start a successful enterprise, why bother? A dole also invites fraud; if you do get additional income, you have a strong incentive to try to hide the fact from the state to avoid losing your grant.

This is why the Taylor Committee did not propose a dole. Instead, it recommended a universal income support grant, noting that the level at which the grant is set should be designed to avoid both of these problems. It should prevent those living in poverty from falling into destitution, but it should not be large enough to encourage people to forego other opportunities to earn income. Further, those finding work would not lose their right to a BIG. The Committee concluded that a grant of R100 a month would meet these criteria.

Another brand of "moral hazard" objection holds that grants rob people of the dignity that comes from working for one’s living. In this view, grants should only be available to the "deserving" poor: the very young, the very old, those with special needs and those who are temporarily out work (but have already demonstrated that they are not just lazy). Everyone else should "lift themselves up by their own bootstraps".

Implicit in this concern is the dubious assumption that grant recipients will choose not to work. That is unlikely, for reasons discussed above. Furthermore, this logic requires that jobs be available for anyone who wants one (as is largely true in the industrialised nations which have popularised this critique).

Like many developing nations, however, South Africa cannot promise anything near full employment. In September 2002, the official unemployment rate stood at 30,5% and the "expanded" unemployment rate, which includes discouraged job seekers who have given up trying to find work, was at 40,9%. The formal sector has shed jobs over the last five years. Even if some of the slack has been taken up by informal sector employment, the available evidence suggests that such jobs are considerably lower-paid and less secure and hence are not adequate substitutes for formal employment. The Committee of Inquiry concluded that South Africa faces a "labour surplus economy with a high skills’ deficit at the lower end".

In short, South Africa is unlikely to be able to offer jobs to all work seekers for some time to come. It is at best nonsensical, and at worst dishonest, to construct a social security system around the premise that all (or even the overwhelming majority of) able-bodied adults can find work. To do so is to condemn a significant minority to perpetual poverty. Will destitute people retain more dignity than poor families saved from malnutrition by a small grant?

Closely linked to concerns about laziness and merit, are fears that people will use a BIG irresponsibly, squandering it on alcohol, cigarettes and lottery tickets. Or that women will have unwanted children in order to collect more grant money. Contrary to the anecdotal evidence that often features in the media, research indicates that more than 90 per cent of the money spent by poor household goes to food, education and transportation. A study conducted by EPRI earlier this year of a small sample in Mount Frere found that households receiving a grant are also more likely to accumulate assets – long seen as an important factor in escaping poverty. Responsibility cannot be equated to income levels. There are irresponsible rich people. And there are irresponsible poor people. So there will inevitably be some abuse of grants, just as there is abuse of existing grants, but their numbers will be small. Even if sensational stories of misuse sell more newspapers, this should not become a rationale for withholding a BIG any more than it should be used to justify withdrawal of existing grants.

Sustainability

The final concern about dependency is more practical than ethical: What if poor households come to rely on the grant, but the state is unable to afford to continue providing it? What if the grant becomes an unsustainable drain on public resources?

In fact, the Committee of Inquiry found that the opposite is far more likely to occur – that a BIG would stimulate consumption-led economic growth, and expand the tax base. Since the bulk of consumer spending by poorer households tends to be on products of more labour-intensive industries, the Committee felt it reasonable to expect that increased spending would stimulate local economies and job creation. Expanding economic activity will translate into additional tax revenues. Also, as incomes increase, more and more households will rise above tax thresholds and begin contributing to general revenues. So the most likely scenario is that the net cost of the grant will diminish over time. In addition, the grant promises to reduce state costs by enhancing the efficiency of public spending in other areas such as health and education.

5.2 Proposed Alternatives to the BIG

Recognising the strong link between poverty and unemployment, some observers have proposed alternatives to the BIG that purport to answer some of the concerns cited above. Many who agree with the Taylor Committee’s analysis, argue that the proper way to deal with a decline in formal sector employment and the resulting increase in poverty is to create jobs. Since attempts to stimulate private sector job creation over the past five years have been so unproductive, they claim that the solution is to expand public works programmes.

The Committee Report makes two responses to this. First, it agrees that public works programmes are necessary and important. It endorses the proposal that as many jobs as possible be created through public works programmes. It applauds government skills training and "learnership" schemes. However, just as it argues that South Africa needs a comprehensive and integrated social protection package and that no one component of that package will be a "magic bullet" to solve poverty (even if some interventions will be easier to put in place and more effective than others), so it says that public works programmes alone will not be a solution for unemployment. The report notes the comparatively high administrative costs associated with public works programmes, which it estimates to be as much as 50 to 100 per cent of the value of the benefit transferred to participants in the such schemes. It recognises that tackling long-term structural unemployment requires changes to structures, and it will require a considerable period for those changes to percolate through the economy and the society.

The Committee also considered "workfare" models that link transfers to employment. It found that, in the United States, the transition to a workfare model has coincided with a deepening of poverty and inequality. Workfare has not created sustainable jobs, but it has succeeded in driving down wages at the low end of the labour market. This contributed to a decline in income for the poorest quintile of households from $10 000 in 1977 to $8 800 in 1999, as well as an increase in those living below the poverty line. Vulnerable groups – in this case women and African-American communities – have been especially hard hit by the change. The Committee concluded: "In a context of structural unemployment, as is the case in South Africa, such policies are unlikely to have any positive impacts." It also expressed a concern that the underlying assumption of a workfare scheme – that there are "undeserving" poor who should be denied access to state resources – ignored apartheid era manipulation of the labour market and could undermine state efforts to eliminate racially-coded prejudices.

The answer therefore is not to exclude the BIG, public works programmes or other important interventions, but to combine them in a mutually reinforcing package of the kind proposed in the RDP.

Finally, some observers have proposed food vouchers as an alternative to
cash grants. These would allow the state to restrict the use of benefits to certain basic commodities and would purportedly help to address concerns about irresponsible use. However, food voucher schemes are typically means-tested, with all of the attendant obstacles to take-up, administrative burdens and opportunities for corruption. Furthermore, even if we are not bothered by the paternalism associated with stipulating what the poor "should" consume, such restrictions seriously undermine the grant's potential to act as a catalyst to self-reliance and broad economic development.


6. TAKING FORWARD COMMITTEE RECOMMENDATIONS ON THE BIG

The future stability and prosperity of our nation depends upon the formulation and implementation of a comprehensive social protection programme that can effectively eradicate extreme poverty, diminish economic inequality and lay the foundations for broad-based development within sustainable communities.

Such a package should not be cobbled together in a piecemeal fashion. It requires a systematic approach, beginning with the articulation of a visionary social protection policy that can guide and lend coherence to subsequent legislation.

The Committee of Inquiry's Report represents the first step in this process. It lays out the issues and proposes possible solutions in the same manner as a Green Paper. The Committee's recommendations should now be developed into a draft White Paper that can act as a catalyst to a national debate in which all stakeholders can participate fully. The emerging consensus should then be crystallised in a final White Paper.

This process is vital to the facilitation of popular participation in the formulation of public policy on social security. Moreover, a clear and comprehensive statement of policy is essential to enable Parliament to exercise effectively its constitutional oversight role.

We therefore urge the Portfolio Committee on Social Development to:
Endorse the findings and recommendations of the Committee of Inquiry's report as a first step in the process of policy formation on comprehensive social protection;
Articulate the need for a broad and coherent statement of social protection policy prior to the tabling of legislation intended to give effect to that policy;
Call on government to expand and extend the national debate on comprehensive social protection by preparing a draft White Paper for public comment;
Facilitate broad participation in that debate by convening public hearings on the draft White Paper; and
Urge the NCOP to assist by creating opportunities for stakeholders at the provincial level to take part in this debate.


7. CONCLUSION

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 Committee of Inquiry's report represents one of the most significant 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 Committee demonstrated the government’s commitment to satisfying everyone’s constitutional right to social security, including appropriate social assistance.

The Committee has done an excellent job. It has commissioned extensive research, solicited the views of a wide range of stakeholders, and synthesised a desirable and attainable vision of a comprehensive social protection package that can weave a tighter and stronger social safety net for all South Africans. The BIG is the keystone of this package. It is the component that can be most expeditiously implemented and can most effectively combat abject poverty. The national debate on social security should now shift from whether we implement a Basic Income Grant to how we do so quickly, efficiently and in a manner that gives priority to children.

APPENDIX A: Transforming The Present – Protecting The Future
Report of the Committee of Inquiry into a Comprehensive System of Social Security for South Africa

Chapter 16: Conclusion

South Africa faces a continuing challenge of alleviating poverty and meeting basic needs. The Government has committed itself to reducing inequalities through providing basic services to poor households. Progress has been made in terms of delivering some of the services. Severe challenges remain, however. There is no income support programme for children between 7-18 years, adults between 18-59 years and no general assistance for households where no one is employed. Over13 million people live below the poverty line and have no access to social security. As such, South Africa’s social security system is neither comprehensive nor adequate.

The Committee has found that much of what we refer to as ‘social security’ derives from the European concept, which took as its basic assumption that social security would develop around formal sector employment. The reality is that in the developing world formal sector employment may never become the norm that it is in Europe. As a result, the Committee has found that the development paths of African economies, and third world countries in general, require a fresh look at social protection systems more appropriate to their environments and needs.

In this regard, the Committee has found that a lack of policy to address income poverty has been a constraining feature of South Africa’s socio-economic programmes. The Committee therefore recommends that an appropriate social security concept for South Africa must prioritise the needs of people without any incomes, with insufficient incomes or who are engaged in informal activities.

In addressing this gap, the Committee has formulated a comprehensive social protection system that enables the attainment of ‘positive-sum’ policy interventions, rather than narrow policy trade-offs between social and economic policy objectives. The Committee is of the view that by creating greater income security the poor, who are currently trapped in survivalist and low-income informal work, become empowered to risk pursuing higher-return activities that can break their cycle of poverty.

In addressing the full spectrum of social protection policy, the Committee paid considerable attention to matters concerning health, retirement, unemployment, children, disability, constitutional and legal requirements, and institutional and financial feasibility. Detailed research analysis has informed the Committee’s recommendations in these areas.

To address income poverty, and underpin the Comprehensive Social Protection framework as a whole, the Committee has recommended a comprehensive and integrated medium- to long-term framework for income support. The Committee is of the view that such a Comprehensive Social Protection framework would simultaneously address the constitutional and socio-economic imperatives through emphasising two aspects:
Ensuring that all citizens have a minimum acceptable standard of living through a social protection package, enabling them to participate and advance in social and economic life, thus reducing socio-economic constraints to sustainable growth in South Africa.
Providing people with their socio-economic rights, thus enabling them to enjoy their democratic rights. As such comprehensive social protection, by providing universal coverage, thus embeds an important form of social citizenship - and could be seen to form a central component of the democratic State’s "contract with the people". Finally, the Committee recommends that an implementation phase for the Comprehensive Social Protection framework be designed with officials from the various Social Cluster Departments, a core group of Committee members and two international experts.

APPENDIX B: History and Platform of the BIG Coalition

The idea of a universal social grant has been growing in popularity for a number of years. It was proposed by labour at the 1998 Presidential Job Summit and endorsed in one form or another by Black Sash the Anglican Church, ESSET, SANE and YCW by the end of 2000. The BIG Coalition was formed in June 2001 to co-ordinate the efforts of these groups, to develop a common platform, and to build popular support for the grant. The Coalition promotes consultation, research and the sharing of information on various aspects of a BIG. Its platform states:

"Poverty and inequality pose the greatest threat to South Africa’s young democracy. A bold initiative is urgently needed to confront this challenge. At least 22 million people in South Africa--well over half the population--live in abject poverty. On average, they survive on R144 per person per month."

A Basic Income Grant would provide rapid and sustained relief to all South Africans by:

providing everyone with a minimum level of income,
enabling the nation's poorest households to better meet their basic needs,
stimulating equitable economic development,
promoting family and community stability, and
affirming and supporting the inherent dignity of all.

The Basic Income Grant should be founded on the following fundamental principles:

Universal Coverage: It should be available to everyone, from cradle to grave, and should not be subject to a means test.

Relationship to existing grants: It should expand the social security net. No individual should receive less in social and assistance grants than before the introduction of the Basic Income Grant.

Amount: The grant should be no less than R100 per person per month on introduction and should be inflation indexed.

Delivery Mechanisms: Payments should be facilitated through Public Institutions. Using community Post Banks would have the additional benefit of enhancing community access to much-needed banking services.

Financing: A substantial portion of the cost of the grant should be recovered progressively through the tax system. This would demonstrate solidarity by all South Africans in efforts to eliminate poverty. The remaining cost should be borne by the fiscus. A range of new measures should be introduced to increase revenue so that the additional cost can be accommodated without squeezing out other social expenditure.