During submissions by civil society groups today, including Cosatu and the South African Council of Churches, the portfolio committee was told South Africa could afford a BIG of R100 per month to ease the plight of some 22 million South Africans living in poverty.
Professor Michael Sampson of the Economic Policy Research Institute and Mr Pieter le Roux of the University of the Western Cape's (UWC) Institute for Social Development, maintained that the BIG could reduce levels of abject poverty by 74 percent and stimulate economic growth through increased levels of disposable household income for poor people.
The cost to the state is estimated at between a nett expenditure of R24-billion to a gross estimate of nearly R50-billion. This would be equal to tax relief measures the South African Revenue Service has introduced in the past years, the committee heard.
Prof Sampson believed the introduction of a BIG would not require a 'radical policy change' from government as it could be seen as a mere extension of the existing social security system.
He however, held high praises for the government's old age pension scheme, describing it as the best system among developing countries.
Seen globally, South Africa has the second lowest tax burden on individuals and private enterprises among industrialised nations since the capacity to collect tax revenue was estimated five percent low.
Both experts believed the BIG could be funded by marginal tax increases or a moratorium on further tax reductions for working South Africans.
The scheme proposed for a BIG is that all South Africans would qualify though economically active households with stable income levels would subsidise the systems through tax levies on their earnings.
'Poverty undermines growth in the economy. A BIG gives everyone a social stake in the economy and will bolster the fundamental foundations for economic growth,' Prof Sampson said.
He disputed arguments of dependency, which claim that unemployed people would become more dependent on state handouts.
Prof Sampson said there was solid evidence that poorer people spent the majority of their incomes on food purchases and used extra resources for transport to find work.
Social Development Portfolio Committee chairperson Cassim Salojee said the committee would embark on a process of public hearings on a comprehensive social security system after Parliament reconvenes early next year. - BuaNews
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