eNCA: MTBPS: Pro-poor policy must be by design, not default!
An op-ed interview with Isobel Frye
A DAMASCENE moment occurred for me last week, sitting in a meeting with the minister of finance before the much- postponed 2021 MTBPS.
In responding to social partners’ concerns about state spend, and particularly the deep fears about the rumoured substitution of the R350 Social Distress Relief Grant with a single family grant, the minister said that government should be praised and not criticised for its budgets. Because the bulk of the state’s spend is targeted at the poor, people should be more grateful, was his sentiment.
This is true.
The bulk of the national spend is on citizens.
But this is not unique to our liberation government: this is the nature of government work and service delivery in every country. The difference in South Africa is the fact that most South Africans are poor. Thus, if the bulk of the state’s spend is equally spent on its citizens, sure the bulk of the spend goes to the poor, but this does not mean that government allocation is pro-poor.
In that moment, I was able to appreciate the chasm in meaning and understanding between the orthodox bean counters who announce by decree that their state allocations must be pro-poor and the advocates of transformative social policy who bemoan the lack of transformative poor-poor allocations.
Pro-poor spending is not a bean-counting exercise. It is an approach to budgeting that starts with the aim of transformation of the status quo. In other words, proper pro-poor spending should be judged by the number of years that it takes for policies to end poverty. It should not be judged by the number of poor people in your country each year.
The concern about the future of the R350 Social Relief of Distress (SROD) grant is a perfect illustration.
Orthodox national budgeting would allocate spend towards need as far as possible and then track the expenditure to monitor whether the budgeting was correct, and the spending accounted for.
Pro-poor spending, however, would be spent on programmes that are designed to move people out of poverty; the success of the policy is the extent to which the conditions of people receiving the benefit are transformed through them participating in the programme.
It is important to say that there is always a need to have policies that provide relief for people in the face of shocks and calamities. That is at the heart of the Social Relief of Distress original grant. A decade ago, I argued for the extension of SRoD to working-age poor people and I was told that SRoD was for distress, not destitution. Poverty is destitution, not distress.
What policy makers should be asking one another is: What are the ingredients that would go into making a successfully transformative pro-poor policy that would assist people in moving out of poverty?
We have about 22 million able-bodied, working-age adults not in employment, education or training (NEET). A pro-poor policy should ensure that these millions of people, with names, hopes, fears and dreams, have access to a policy catalyst that will change their objective material conditions in such a way that they no longer are in the same desperate situation.
What could the change be that would make for a successful pro-poor policy?
Of course, everybody would like to have a decent job, the security of a well-paying job with paid leave and benefits, career pathing and the satisfaction of knowing that what you are doing matters to society.
But, for most people, that is not going to happen. There are no jobs available, and the skills of the unemployed, 90% of whom have no training beyond matric, do not make for easy hiring.
Skills training and further education are necessary policy options, but that is not going to transform millions of people’s lives.
A house? That is a great idea, and it is also a constitutional guarantee. A solid house will enable people to live with a bit more security and to make a home. It can transform much for people, but they will need more.
A decent level of income grant – like the R1 335 poverty line-indexed amount to each adult every month would be a singularly transformative policy. It would go beyond the too-little R350 grant that cannot even buy enough food, it would provide for people to start a micro business, buy some ingredients and electricity to cook some fat cakes, or buy and resell some tomatoes and then to grow and sell tomatoes.
Rather than pushing a top-down design of what SMMEs should be doing, if policy designers had faith in ordinary folk and in the econometric models that underpin policy making, they would see that the transformative catalyst in a large-enough but affordable universal basic income does seem to be the only real pro-poor policy that has been mentioned in recent times, able to objectively change the boundedness that characterises life’s choices unfolding for so many millions of people.
We can understand in our hearts when the minister of finance says we must quit complaining as most of what he spends is on the poor. We don’t want spending on the poor by default. We want real pro-poor spending by design to end poverty.
*Frye is an executive director at the Studies in Poverty and Inequality Institute
** The views expressed here are not necessarily those of IOL and Independent Media.