Andile Sokomani
14 December 2007
opinion
Johannesburg — TO BE or not to be a welfare state - that is the question SA has yet to resolve as impoverished millions clamour for access to free but limited state-provided services, be it housing, education or social grants. In the case of the latter, the government has in the meantime opted for a selective protection system, which targets particular social groups, namely the disabled, children, the aged, and war veterans. Though still much debated, the idea of a universal welfare system that covers everyone, including the unemployed millions who are excluded by the current system, was not the preferred option.
Known as the basic income grant , the proposal is to provide each man, woman and child aged seven to 65 with a monthly welfare check of R100. Though promoted by a broad coalition of labour unions, churches, nongovernmental organisations, opposition politicians and even Social Development Minister Zola Skweyiya, the idea struck little ideological resonance with the free-market reform forces within President Thabo Mbeki's administration.
Consequently, other vulnerable social groups whose material condition is in all respects similar to the targeted population were left out of the system.
Is it not then naive for the government to expect the excluded group not to seek other means of accessing social protection? More than half of SA's 47-million people survive on less than $2 a day. While 12-million receive grants, more than 13-million have no access to any regular income, even from a grant-receiving relative.
Up to 1-million of the 12-million grant recipients are believed to be getting the grant illegally, costing the state a conservatively estimated R1,5bn a year.
Yet there is strong evidence that most of these illegal cases are motivated by need rather than greed.
The Special Investigating Unit (SIU), which is gaining an increasing reputation as the state's fraud buster, would admit that most illegal beneficiaries of grants are not the criminally inclined.
The mounting cases of illegal beneficiaries are indicative of the inadequacy of the targeted approach to social protection, and viewing the problem as a token of moral decay misses the point. So does the use of law enforcement to recoup the billions of rands lost to the state through welfare fraud.
While it is certainly impressive that the state has saved R7,7bn in welfare scams since commissioning the SIU more than two years ago, it would seem that far greater gains would accrue if the social safety net were simply cast wider in order to reach all the poverty-stricken households.
Rather than trigger spending of the state's limited resources on catching fraudsters, social grant fraud should serve to remind the government that it is not doing enough to mitigate widespread poverty. Doing more to help the poor should involve rethinking the social protection system and considering what no other African country has yet done: creating a welfare state.
For nearly a century, welfare states such as the UK, the Netherlands and the US, from where SA derives many aspects of its social security framework, have demonstrated that free-market reforms can be pursued while still cushioning the poor with cash, and other benefits. It is not a matter of choosing one over the other.
The examples from the west illustrate that part of transforming to a modern market-driven democracy is to take responsibility for those whom the markets leave behind. Though weak by western standards, the South African economy is the most industrialised in sub-Saharan Africa, giving the country the advantage of a middle class. This in turn affords the possibility of some cross-subsidisation and makes the case for basic income support to all poor citizens.
In a country with a population for which poverty is not the exception but the rule, some relief in the form of the dole may see a dramatic decrease in welfare-related fraud. Slightly higher taxes to finance the scheme may present some discomfort to the middle class and the affluent, but the resultant reduction in the country's extremely high Gini coefficient would most certainly benefit the collective.
A measure of inequality of income or wealth distribution, SA's Gini coefficient topped 57,8 in 2000, depicting the country as one of the most unequal societies in the world. Since then, there has been a steady increase in wealth and income disparity.
The redistributive impact of a universal grant remains progressive regardless of any macroeconomic qualms the finance minister may have about its financing.
The long-term success of the welfare antifraud campaign hinges less on tough policing than on replacing the means-tested social protection framework with an all-inclusive, fully fledged welfare state. Abolishing the test for eligibility also means less welfare bureaucracy and ultimately less corruption and inefficiency. While broader social protection is not a panacea, it is the foundation for a just, egalitarian society.
Sokomani is a researcher in the Institute for Security Studies' Corruption and Governance Programme.
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