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BIG conference focuses on funding solutions

4th December 2003

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The Basic Income Grant Coalition’s national conference continued yesterday in Soweto, where 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.

The objective of the conference is to bring together civil society organisations, government and business to discuss ways to work together to fight poverty.

On the table is the Basic Income Grant (BIG) - 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.

Yesterday, 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., whereby the technology will be integral to the new Home Affairs National Identification System (Hanis).

This system will reportedly enable social grants to be paid more quickly and efficiently, whilst introducing new mechanisms to prevent fraud.

Member of the BIG financing reference group Elroy Paulus presented the findings of a six-month investigation of potential methods of financing the grant.

The research, co-ordinated by Black Sash, brought together 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 financing packages, they agreed on several important conclusions, including that South Africa can afford a BIG, and finance the grant without necessitating increased deficit spending and there are a number of feasible financing options for a BIG, each of which has differing redistributive implications.

Also, the optimal financing package is likely to involve a mix of revenue sources.

It was concluded yesterday that the BIG would substantially reduce the poverty gap and would effectively eradicate extreme poverty, as well as be developmental.

Chief director of the grants administration for the Department of Social Development Selwyn Jehoma, however, conceded that he had only recently begun to think about how government could finance and deliver a BIG.

He questioned whether 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 yesterday attended two parallel sessions on gender and the BIG and the grant’s potential impact on people living with HIV/Aids, where the concluding plenary session focused on growth, investment and inequality, inlcuding sessions on the Basic Income Grant and youth and children, as well as its impact on food security.
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