SANE Views

Vol.7 No.2, 14 March 2007

How Exactly Will Poverty Be Addressed?

Margaret Legum

Despite the almost universal acclaim for the Budget this year, there remains a persistent, dark, ugly hole. It is our old friend poverty. Although it is overtly government’s highest priority, the path to poverty’s eradication remains obscure.

Government thinking, as set out in many recent policy speeches, is clear in principle. First, they do not believe that poverty should be addressed directly by giving people money. They reckon that although old and disabled people and children should get grants, able-bodied, but unemployed, adults should not. They believe it is undignified to get handouts if you are available for work.

That means government intends ending poverty only through policies that will enable earning through work. That is what needs interrogating.

Productive employment could happen in one of three ways. People could make a living off the land, if they have any: that is not an option for most poor South Africans, few of whom have access to livelihoods from land. Land distribution was actually neglected in the Budget speech. Second, they can get a job – be employed by someone else. Third, they can set up their own enterprise, making a livelihood by small business or social entrepreneurship.

We the public need to know exactly how government thinks poverty will, in fact, be diminished in one of those ways. What exactly will produce enough decent jobs that pay wages or salaries to enable people to live healthy lives?

These are not new strategies. They are the means through which government has expected poverty to diminish over the past decade or so. So far those policies have not made anything like a serious dent in poverty. They have left some 40% of our people without regular income from working; and because the highest proportion of unemployment is borne by Black Africans, that means well over 60% of Black men and women have no jobs.

What’s more, millions of adults classified as employed are simply survivalist small traders or opportunists eking out a hand-to-mouth existence. And many more ‘employed’ people have formal jobs that pay less than the poverty line – security guards, domestic workers and catering staff spring to mind. These cannot possibly be regarded as taking people out of poverty.

However you read the statistics no one - in government or out of it – can deny the stark misery, the daily horror, the childhood suffering that is the daily experience of perhaps half of all South Africans. Government has set the target of halving it by 2014. But they have said nothing new about how that will happen.

The problem is that the opposition in Parliament is not doing the job of seriously questioning government on the effectiveness of its policies on poverty. The DA supports government’s economic policies, because their constituency, being largely well off , benefits by current policies. Other opposition parties are too feeble be taken seriously as representative of poor people.

So here are the questions that we the public need to ask the government about its promises on poverty.

Government says employment will grow as the economy grows – calculated by the gross domestic product (GDP). But ‘growth’ cannot be aggregated in that way. Some kinds of growth simply put more money into the pockets of rich people. For example hikes in the price of resources like gold, platinum and oil will raise the GDP and the rate of growth, but have virtually no positive effect on employment or poverty. Question: Please tell us what kind of growth government expects, as a result of which policies, show us its path to poor people, and tell us what assumptions are being held to produce those answers?

We know that growth along current lines is unsustainable: diminishing supplies of oil and the effect of pollution on climate change will force us to change the path of growth. Question. Is long-term sustainability being taken into account in government’s calculation of growth and the effect on poverty?

Government says South Africans save and invest too little and borrow too much, so a restricted, balanced budget is necessary - in effect to save for us. Again, the questions of saving, debt and investment need disaggregating. Question: Obviously savings cannot be expected from people only just surviving. So why not put higher taxes on people who have the income but do not save.

Our open trade policies are inviting competition from countries which have lower labour costs than we do. So far they have resulted in a net loss of South African jobs. Question: What is government thinking about the effect of trade in the future? How well do they reckon our enterprise will cope with more imports from countries like China, India and elsewhere?

Finally, even if the answers suggest that we will in fact halve unemployment by 2014, what about the other half? What about those millions of poor people left untouched despite the most optimistic assumptions? Are they to put their digestion systems on hold until government can produce an economy in which they can afford to eat?

In the absence of an opposition party to do the job, we must ask the hard questions. Must poor people continue to bear the costs of government’s scruples about handouts and dignity? What is dignified about living off a child’s grant, or a pensioner? Why is it less humiliating to beg at the traffic lights, or scavenge on a rubbish tip or steal from other poor people? Has anyone asked people with no income whether they would feel bad about getting a grant?