Basic Income

One platform that I really liked (and perhaps the only one) from the EFF in the last elections, was their proposal for the Mandatory Basic Income. For some reason, I have seen two very interesting articles on the same issue in the past two weeks - the first discussion was on the Freakonomics podcast, while the second was an article on Vox.com on an experiment in Kenya.

The concept is simple - give every citizen of a country a guaranteed base income. Some models have the income go down as the citizen gets paid by other sources (employment, investment); while others have such income as supplementary to the guaranteed income. In most models, there is no other state support (such as unemployment insurance). South Africa already has something that can be used as a base - the child support grants and other similar social grants; but the amounts are minuscule and sometimes may incentivise the wrong things.

In my mind, basic income should be a foundational platform. In South Africa's Bill of Rights (Chapter 2 of the Constitution), as well as the UN Universal Declaration of Human Rights envisage that all persons have the right to shelter, food, water, health care and education - and this is an area that most countries fail. The basic income, as expanded upon by the Freakonomics podcast manages to be the rare initiative that makes sense both as a libertarian and a liberal - it manages to address freedom of choice and meet the social need.

If the basic needs are met - it frees up capacity for individuals to pursue their ambitions - be the best artist they can be without wondering how to put food on the table; or train to be the best sportsperson as you don't need to worry about how to put in 8 hours a day at work and 6 hours a day in training; or start the business you want without fear of living on the streets; or send your children to school because you don't have to rely on them to get work.

Funding basic income is obviously a problem. For the tax payer - it's easy - it's a tax break. But the approach may spur innovation and small business; so it's not necessarily a tax hole. And off course, how much is basic income? A basic income of R4500 (which I think was the EFF value) per person in South Africa equates to roughly 225 billion Rands, a month - a fifth of South Africa's annual budget! One can take the approach of - basic income but nothing other than basic infrastructure (roads, airports etc); or adjust the income parameters to have different values for children than adults. 

As the Freakonomics podcast highlights, there is potentially a very big looming robotics and automation revolution - one that might further reduce job security; and further entrench the gig economy. In such a scenario, basic income may not be a luxury - it may become a necessity. It is something that needs further investigation.