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Publication Details

Reference
Nyar, Annsilla (2008) South Africa needs a pro-poor budget. Eye on Civil Society : -.

Summary
South Africa needs a pro-poor budget

Okay, we’ve been saying this so often that’s it’s become practically a mantra for the Center for Civil Society! But no matter how loudly and how often we say it, the grim facts remains unchanged: poor and marginalised South Africans are not getting a fair deal from the government it voted in. And last week’s budget, as unveiled last week by Finance Minister Trevor Manuel, under the deceptively encouraging slogan “we are all in this together”, just proves the point.

As Manuel’s twelve- year portfolio has come to be characterised, the budget reflects an approach of caution, probity and financial prudence. It is an extremely balanced budget. It has maintained a prudent balance between savings and expenditure. It has not cut public spending, nor has it been excessively reckless. Growth and revenue expectations have received prudent downward adjustments and government expenditure is set to increase at a significantly slower rate than in preceding years. Surpluses will provide further reserves against unforeseen economic circumstances. As Manuel says, the budget will put South Africa in good stead after the storm.

But financial prudence has to be offset against the critical needs of the most vulnerable sectors of society. A society can only be judged by how it treats its most vulnerable members-its elderly, its sick, its children, its disabled-and its willingness and ability to provide protection and safety net for them. It is here where the budget falls desperately short. We have to be able to make inroads into poverty. The budget needs to be pro-poor and while it deceptively projects the appearance of something of a ‘left stance’, it instead pretty much leaves its most vulnerable citizens to the vicissitudes of the economy and the market.

Take the issue of social grants, for example, one of the most basic safety nets that the poor can mobilize against external economic shocks. This year’s budget for social grants provided only a modest increase of 13.3% to R 70.7 billion from the 2007/8 budget of R62.5 billion. Although inflation adjustments have been made to grant amounts in line with broad consumer inflation indices such as CPIX, the inflation rate for household expenditures is certainly likely to be higher than this. For example, we saw food prices increase by 10.3% in 2007. Poor households will still suffer.

Therefore, for example, one is hard pressed to imagine that the paltry increase of the child support grant from R200 to R220 will, in any way, make a dent in the expenses of poor households. Instead they will continue to remain living a hand to mouth existence, particularly so given that the grant tends to support entire families, rather than just the children for whom it is intended.

Moreover, the extension of the child support grant eligibility age to 15 in January 2009, is nothing more than outrageous. Can we not offer our children the protection and care of R220 a month, at least until they finish their schooling?

Herein lies the problem: coupled with a profound lack of basic creativity and will, is the lack of a pro-poor orientation which would promote social equality in our society. One wonders how much creativity and imagination is required to wonder about how much more would a more radical expansion of, say, the child support grant cost? This is not to discount that increases in social spending have not occurred and that progress has not happened on a number of fronts. For South African children, we have seen improvements in access to education, nutrition for primary school children etc. But we need bold visionary social development policies to address the persistent unemployment, poverty and inequality in South African society. These policies will prevent a kind of mass ‘underclass’ of what Ashwin Desai calls “the poors” living on the periphery of society with no means or capability of escape from those desperate margins. Now what kind of social policies and how best to achieve social justice is a matter of hot debate. Direct income support measures are only one aspect of moving people out of welfare and into productive work. We also need investment in physical and human capital through further education and skills initiatives and infrastructure. The budget does offer this, in part. But it does not go deep enough to make inroads into South Africa’s dreadful condition of poverty and inequality, not deep enough in any way.

The central preoccupation of the budget should be the question of how a balance can be found between striving for global competitiveness and building the kind of strong domestic economy which can absorb South Africa’s critical mass of poor and marginalized people. The budget should ideally chart the way toward realizing those economic and social goals. This is the stuff of which the dreams and aspirations of South Africans are made of. We need a pro-poor budget.

Annsilla Nyar is a researcher at the UKZN-based Center for Civil Society.

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