Can a basic income grant improve the quality of life for the poor in South Africa: an analytical review

Abstract

The relevance of this scientific problem is that there are numerous calls and arguments from civil society organisations, labour unions, progressive economists, and policy experts to the South African government regarding the introduction of basic income grant. This will help protect the unemployed from poverty and stimulate economic growth. Systematization of the literary sources and approaches for solving the problem of improving the quality of life of the poor indicates that the government (led by the African National Congress) since 1994 implemented a social security policy (the child support grant for women). At the same time, the government’s position regarding the feasibility of introducing of basic income grant as a tool for economic stimulation has changed. The African National Congress disagrees with the need for basic income grant as a tool for poverty alleviation and economic growth. The main purpose of the research is the analysis of the prerequisites for the change in the position of the African National Congress regarding the feasibility of introducing basic income grant: basic income grant is a tool for stimulating economic growth and overcoming poverty for most of the disadvantaged population of South Africa, or a means for the government to preserve its positions, which are weakening among the South African electorate. The paper presents the results of an empirical analysis, which proved that basic income grant will contribute to the increase of the national tax base as those not earning an income can start buying and selling goods and be taxed. At the same time, at the initial stage, the introduction of basic income grant will lead to an increase in the level of income taxation of the employed population. Analytical methods of scientific literature analysis became the methodical tools of the conducted research. The research empirically confirms and theoretically proves that the introduction of basic income grant could stimulate the economy by ensuring that the unemployed become economic participants by having disposable cash to spend and start business activities.