SPI, a critical social security think tank in South Africa, has called upon the President to urgently host an inclusive debate on macro-economic priorities in South Africa in light of the media’s reporting of Treasury’s warning of impending cuts to key social spending on health care, education and social grants.
SPI’s executive Director, Isobel Frye, asked the President (during the ANC Manifesto Review for think tanks and academics held in Sandton on 2 September 2023) to consider alternative models of relieving the economy of the country from the strangle-hold of debt and inflation targeting, which have not worked anywhere in the world, and especially among developing economy countries. SPI says that the country’s macro -economic policies must be by targets of GDP- and employment growth.
On 5 September, SPI followed this personal engagement with a formal letter to President Ramaphosa as President of South Africa. SPI called on the President to convene a panel of experts a as a matter of urgency, before next month’s Medium Term Budget Policy Statement. It should include monetary as well as fiscal policy experts with a demonstrable record of alternative modelling and experience in a setting as complex as South Africa’s. Brazil is an example of a country with similar constraints that adopted innovative models of economic stimulus which directly impacted growth. South Africa must also innovate towards social policies which bring the promises of the Freedom Charter to realisation.
In the letter sent to the President on 5th September, Frye wrote:
“All indications are that the coming MTBPS will herald a more savagely austere budget framework with significant further cuts to social wage spending on education and healthcare. Together with social income grants, these state services, or budget line items, form the nexus of the social compact between the citizen and the state. To slash these is a betrayal, many would say, of this social contract.”
Frye’s comment to the President at the Manifesto Review was in response to the position taken by the ANC that a Universal Basic Income policy will be introduced in South Africa ‘ when the state can afford it.’
Much research has been published in recent months about the desirability of UBI in South Africa. SPI’s published research demonstrates with econometric modelling that UBI will not only meet people’s basic needs but it will also transform and fast track inclusive and sustainable economic growth and recovery.
The Presidency has not yet responded to SPI’s call for the urgent facilitation of this critical debate.
“We would like to see a strong statement of political will and commitment.” says Frye. “With the unsustainable unemployment figures in South Africa and the fact that South Africa is the most unequal country in terms of income and wealth globally, the persistent absence of reviewing the causality of national structural fundamentals is very difficult to understand”.
The Social Policy Initiative (SPI) is the first think tank established to focus on social security policy in South Africa. SPI is also one of the few think tanks that is proudly feminist in its orientation and analysis, recognising that economic and social recovery will not happen without recognising that all policies start with human agency.
For further information please contact Isobel Frye: 0845081271 or isobel@spi.net.za or Moses Kas on 084 0658158 or moses@spi.net.za
