Poverty at worst level yet, but a basic income grant is unaffordable - CDE
SA cannot afford a basic income grant, says the Centre for Development Enterprise. In a new report, it argues there are better ways to fight poverty.
A grant - which would cost between R200 billion and R400 billion a year depending on its size - would make such a large demand on the budget it would push SA deeper into a fiscal crisis and undermine economic growth. The consequence would ultimately be fewer jobs and greater hardship for the poor, says the CDE.
The CDE released a new report on Tuesday, which explores whether the claims made by proponents of the BIG that it could easily be funded from additional taxes. The proponents argue that while a BIG would take money out of the economy in tax, the grants would be a stimulus to the economy and result in higher growth. This would in turn lead to higher taxation, creating a virtuous cycle.
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