As the debate around a basic income grant advances, the funding of it has received relatively little credible attention, despite, as we show in this report, the profound consequences of different approaches. We analyse in detail the funding options, especially tax but also debt issuance – viewing wider expenditure reprioritisation at this scale as unfeasible.
The political economy of a large BIG will be a significant factor in the run up to national elections in 2024. At the heart of the issue is that there are much larger spending demands for a broader social wage of as much as ZAR500bn/year. Whatever funding is allocated to a BIG (or any form of larger, permanent, successor to SRD) will then not be available for other social wage spending. There will need to be clear and well communicated political choices made understanding the consequences, trade-offs, and risks.
Download the report below.