Mainstreaming Social Justice in Fiscal Policy Design: A Socio-Legal Case for an Income Support Grant ()
1. Introduction
“Social justice makes societies and economies function better and reduces poverty, inequalities and social tensions. It plays an important role in attaining more inclusive and sustainable socio-economic development paths and is key for reaching the Sustainable Development Goals (SDGs) of the 2030 Agenda for Sustainable Development (2030 Agenda), especially at a time when the achievement of those goals remains far away.”
United Nations (UN) Secretary-General António Guterres (2023)
A fierce debate that has been raging in South Africa has been about the wisdom and efficacy of retaining and upgrading an income assistance known as Social Relief of Distress (SRD) Grant. The SRD Grant was introduced as part of a suite of mitigation services to offset the adverse impact of government regulations introduced to curb the spread of COVID-19, key among them being lockdown regulations restricting and redirecting commerce and the movement of people. The main considerations undergirding fiscal policy in South Africa tend to be growth in Gross Domestic Product (GDP), jobs and avoiding a strain on government expenditure and indebtedness. By and large, such approaches ignore constitutional obligations particularly those that transcend the classical negative duties on the State and impose positive duties. This includes transformative governance to fulfil the rights in the Bill of Rights including advancing equality and ensuring equal access to socio-economic rights such as education, health, food, housing, water and social security and assistance from the state when unable to provide for self.
The paper locates South Africa’s fiscal policy discourse, particularly regarding income support, within these tensions. It commences with contextualising the SRD Grant debate in the constitutional commitment to social justice, and clarification of the concept and theory of social justice. It outlines constitutional and international human rights guardrails that mandate advancing equality and the fulfilment of the rights in the Bill of Rights by the State, pointing out implications for state obligations regarding income support. The paper proceeds to engage with the affordability of income support in the light of existing pressures on the state fiscus and outlines possible revenue generation such as wealth tax and windfall tax. It concludes with the value of providing income support or cash transfers on the economy and broader societal well-being. It further introduces the Social Justice Impact Assessment Matrix (SIAM) as an innovative tool that allows leveraging data analytics to predictively assess whether a policy will exacerbate poverty and inequality or reduce same thus making it easier to adopt social justice attuned policies in addition to improving policy proficiency.
1.1. The Context
In Government of the Republic of South Africa v Grootboom (2001: para 1) (“Grootboom”), the Constitutional Court declared that:
“The people of South Africa are committed to the attainment of social justice and the improvement of the quality of life for everyone. The Preamble to our Constitution records this commitment. The Constitution declares the founding values of our society to be “[h]human dignity, the achievement of equality and the advancement of human rights and freedoms.”
Indeed, the Constitution of the Republic of South Africa (1996) (“Constitution”) places social justice and the related achievement of equality at the epicentre of its transformative intent, exalting it as one of the three strategic pillars and goals of the society sought to be achieved through the implementation of the blueprint entailed in its provisions. In its Preamble, the Constitution unambiguously declares that:
“We, the people of South Africa,
Recognise the injustices of our past.
Honour those who suffered for justice and freedom in our land;
Respect those who have worked to build and develop our country; and Believe that South Africa belongs to all who live in it, united in our diversity.
We therefore, through our freely elected representatives, adopt this Constitution as the supreme law of the Republic so as to—Heal the divisions of the past and establish a society based on democratic values, social justice and fundamental human rights;
Lay the foundations for a democratic and open society in which government is based on the will of the people and every citizen is equally protected by law.
Improve the quality of life of all citizens and free the potential of each person; and Build a united and democratic South Africa able to take its rightful place as a sovereign state in the family of nations.” (ibid, emphasis added)
The social justice-anchored transformative intent of the Constitution, at the core of which is resetting the asymmetrical power relations manufactured through colonial and apartheid unjust laws, policies, and social schemes, has been affirmed by the Constitution in various judgments. In S v Makwanyane (1995) (“Makwanyane”), the case that abolished the death penalty, Mahomed J stated:
“All Constitutions seek to articulate, with differing degrees of intensity and detail, the shared aspirations of a nation; the values which bind its people, and which discipline its government and its national institutions; the basic premises upon which judicial, legislative and executive power is to be wielded; the constitutional limits and the conditions upon which that power is to be exercised; the national ethos which defines and regulates that exercise; and the moral and ethical direction which that nation has identified for its future. In some countries, the Constitution only formalizes, in a legal instrument, a historical consensus of values and aspirations evolved incrementally from a stable and unbroken past to accommodate the needs of the future. The South African Constitution is different: it retains from the past only what is defensible and represents a decisive break from, and a ringing rejection of, that part of the past which is disgracefully racist, authoritarian, insular, and repressive and a vigorous identification of and commitment to a democratic, universalistic, caring and aspirationally egalitarian ethos, expressly articulated in the Constitution. The contrast between the past which it repudiates and the future to which it seeks to commit the nation is stark and dramatic. The past institutionalized and legitimized racism. The Constitution expresses in its preamble the need for a “new order…in which there is equality between...people of all races”. (ibid, para 261, emphasis added)
1.2. Alarming Levels of Poverty and Inequality
Thirty years into democracy, South Africa has become one of the most unequal societies in the world (Statistics South Africa, 2020), with a Gini coefficient of 0.68 and a Wealth Gini coefficient sitting at 0.88. Unemployment is hovering around 40%, inclusive of the NEETS (Not in Employment, Education or Training), and the poverty rate has worsened from 55.5% to 62.6% during the COVID-19 pandemic (UBS Global Wealth Report, 2023). The country is caught up in a national debate regarding whether or not to retain the Social Relief of Distress grant (SRD), which was extended to destitute persons following the economically devastating regulatory impact of regulations that constrained social and economic freedoms in an effort to curb the spread of the COVID-19 pandemic that afflicted the world in 2020. Despite the fact that the family structure for the majority of South Africans, primarily Black people legally classified as “Africans” and “Coloureds”, was raptured by colonial and apartheid laws and policies, some economists have argued that if some income support grant were to be retained, it has to be a family rather than an individual cash transfer measure. Harron Bhorat is one of the proponents of the family grant (Bhorat & Francis, 2022), Leibbrandt also seems to lean in this direction (Leibbrandt, 2021).
After raging for three years, the debate on the future of the SRD grant has been partly resolved by President Cyril Ramaphosa’s decisive announcement during the State of the Nation Address (SONA) on 8 February 2024. President Ramaphosa stated that government “will extend it and improve it as the next step towards income support for the unemployment”) (Ramaphosa, 2024). Until then, the public debate centred on the desirability and affordability of the SRD grant, whether the amount should be increased and whether it should be converted into a Universal Basic Income Grant or a similar income support grant for those in need. Despite rapid inflation due to the COVID-19 shocks and further supply chain disruptions primarily due to the Ukraine war, the grant has been reluctantly retained by government at its original rate of R350, which was the price of a modest food hamper in mid-2020.
1.3. Purpose: Mainstreaming Social Justice into Fiscal Policy
The paper was originally developed as a Policy Brief submitted to the government as a contribution towards an approach to the future of the SRD grant and other contentious fiscal policy matters that is congruent with constitutional governance and accountability. The Policy Brief’s anchoring in social justice was informed by the status of social justice as both a core constitutional commitment, an international obligation and the raison d’être of the Centre for Social Justice (CSJ) at the University of Stellenbosch.
The work forms part of the CSJ’s efforts to serve as a catalyst for more proficient and efficient advancement of social justice. The focus is on ending poverty and structural inequality by 2030 in pursuit of the global Sustainable Development Goals (“SDGs”), continental objectives in the African Union’s Agenda 2063 and national objectives under the National Development Plan for the same period. A major concern underpinning the Policy Brief was an inadequate correlation between progress towards advancing equality, ending poverty and fostering the healing of the divisions of the past in 30 years of democracy and the promise of transformative constitutionalism. This is based on understanding that the 1993 interim Constitution that ushered in a new order became operational at the beginning of 1994.
The key proposal is that the resolution of outstanding issues regarding the SRD grant or ISG be located in constitutional governance and accountability, focussing on optimised delivery on social justice commitments and human rights obligations. This is based on the understanding that the constitutional injunction is to establish a society that is based on democratic values, social justice and fundamental human rights. While economic pragmatism is a prudent approach, it is important to understand that constitutional fidelity requires building a democratic country that is socially just and where all enjoy all human rights in equality with each other. The economy, accordingly, is not the quest but a vehicle in support of the quest.
A further suggestion is that the constitutional fidelity considerations regarding the future of the SRD or a similar ISG, such as the Universal Basic Income Grant proposed by the Institute for Economic Justice (IEJ) (Institute for Economic Justice, 2021), should be infused with appreciation of relevant international human rights obligations. The architecture should be informed by tailoring for all and tailoring to repair using systems thinking and design thinking approaches anchored in ubuntu and related shared humanity economic considerations.
To foster tailoring for all and repairing where necessary, the paper proposes leveraging the Social Justice Impact Assessment Matrix (SIAM) test to predictively assess the unintended equality and poverty impact of all proposals on the future of the grant and other fiscal policy decisions. In the context of fiscal policy, SIAM, an innovative policy design and law reform tool created by the CSJ, can operate like gender budgeting (Madonsela, 2007: p. 10)1. The difference is that SIAM employs a multifocal social justice lens in predictively assessing potential disparate impact policies, laws and programmes at the design stage and eschewing policy pathways that are likely to cause or exacerbate inequality and poverty or implementing such with mitigation strategies.
2. Conceptual and Theoretical Frameworks
2.1. The Concept of Social Justice
During the Symposium on Social Justice and The Law Education, participants observed that:
“Although social justice is at the core of international human rights instruments, such as the Universal Declaration of Human Rights (UDHR) and the International Convention on the Elimination of All Forms of Racal Discrimination (ICERD) and an express constitutional goal and commitment of constitutions such as those of South Africa, Kenya, India and Nepal, it tends not to be expressly weaved into the body of the constitutions, particularly the Bill of Rights.” (Centre for Social Justice, 2023: p. 10)
Except for outliers such as the Constitution of Nepal, normative standard-setting instruments that mandate the advancement of social justice, including the pioneering 1919 Treaty of Versailles, which set the tone and established the International Labour Organization (ILO) as the custodian of social justice advancing transformation, do not define the concept of social justice.
This has led to reliance on the concept’s etymology, philosophical discourses, court jurisprudence, and legal scholarship. The concept of social justice was coined in the 19th century by Italian Jesuit philosopher Luigi Taparelli around 1843 in response to the unconscionable economic disparities of the first industrial revolution and mass production in agriculture (Behr, 2003: p. 99). Three years later, fellow Italian philosopher Rosmini and Mingardi (2007) further developed it, bringing the concept into the legal and constitutional thought arena around 1847. American philosopher John Rawls (1971: pp. 1-47) and Indian economist and philosopher Amartya Sen (2009) are the most recent philosophers to unpack the concept of social justice. Rawls simplifies the essence of justice, including social justice to fairness to all in the distribution of the fruits of social co-existence and mutual cooperation (Madonsela, 2022: p. 164). Sen balances the distributive dimension with a capabilities-maximising dimension.
The CSJ’s definition of social justice, which is primarily informed by South Africa’s Constitutional Court jurisprudence, is that social justice is justice that is concerned with equal enjoyment of all rights and freedoms by all, regardless of human diversity. Such should be reflected in just, equitable and fair distribution of all opportunities, resources, benefits, privileges and burdens in and between societies (ibid).
2.2. Social Justice Lessons from Landmark Constitutional Court Cases
Key Constitutional Court cases that have affirmed social justice as a constitutional imperative while clarifying its meaning and the transformative duty it imposes include Grootboom, the right to access to housing case quoted earlier, and the restitutive justice affirming case known as Minister of Finance v Van Heerden (2004) (“Van Heerden”).
From its jurisprudence, it can be discerned that the Constitutional Court:
1) Considers social justice as a dimension of ubuntu and the substantive notion of equality (Makwanyane, which abolished the death penalty).
2) Views the advancement of social justice as a constitutional commitment at the core of which is an equality duty that must inform all laws, policies and decisions in government (Van Heerden, which approved a special, fully taxpayer-paid pension for parliamentarians from racial groups that had been denied this opportunity, by racially discriminatory laws before 1996).
3) Has made it clear that the notion of equality that underpins the Constitution is substantive equality, where equality transcends the requirement of same treatment regardless of differentiated circumstances, including advantages and disadvantages and a clear rejection of an equality paradigm that solidifies existing power and material asymmetries that are a legacy of past injustices (Brink v Kitshoff, 1996: para. 42)2, which recognised that the effect gender and intersectional discrimination lasts long after the unjust laws have been removed and that substantive equality must integrate a remedial aspect in consideration of such).
4) Has regularly noted that the majority of those who seek state assistance to access and enjoy social and economic rights, such as those in section 27, are predominantly from groups whose ability to earn decent livelihoods and enjoy social mobility was deliberately curtailed by colonial, apartheid, patriarchal and other unjust laws and norms3.
5) Regards restitutive action as an element of substantive equality and essential for the advancement of advancing social justice and related equality duty and that, minus such restrictive action in situation of structural accumulated advantages and disadvantages, substantive equality and constitutional compliance cannot be achieved (Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and Tourism, 2004: para. 744; Van Heerden, 2004 per Moseneke J).
6) Accepts that there are different scales of oppression that make disadvantaged groups vulnerable to being “left behind” through facially neutral laws, policies and social schemes that are not infused with a multifocal lens to meet all persons where are particularly those who exist at the axis of overlocking inequalities and related injustice (Mahlangu v Minister of Labour, 2021 (“Mahlangu”)), where the Court rejected government’s affordability and practicality arguments for the continued exclusion of domestic workers from the social security afforded by the Compensation for Occupational Injuries and Diseases Act (“COIDA”). Worth noting is the Court’s obiter on past injustices continuing to shape today’s structural power and economic asymmetries and that social assistance has a restitutive dimension (Mahlangu, 2021: para 63).
3. Constitutional and International Normative
Accountability Standards on Income Support
3.1. Income Security and Social Support as a Guaranteed
International Law and Constitutional Right
Mahlangu is also the most instructive case that provides clarity on the normative constitutional governance and accountability standards that should inform government when determining the future of the SRD grant. In Mahlangu, the Constitutional Court declared:
“The cornerstone of any young democracy is a comprehensive social security system, particularly for the most vulnerable members of society.” (ibid, para. 3)
Mahlangu is on point because the SRD grant or ISG or Basic Income Grant (BIG) for those in need is both a matter of social justice and of substantive equality and related human rights obligations. At the core, are claims and duties regarding social and economic rights such as the right to social security support and the right to a decent standard of living that is adequate for health and well-being, human dignity, and the development of each person’s personality. The Constitution and international law clearly state that the state has a duty to ensure equal enjoyment of these rights for those lacking livelihoods in circumstances beyond their control. Worth noting is that the Constitutional Court’s view in Mahlangu was that denying social security and assistance to those in need of support amounted to denying human dignity and equality. This is apparent clear where the Court said:
“Economic, social and cultural rights, of which the right of access to social security is a part, are indispensable for human dignity and equality”. (ibid, para. 48)5
3.2. International Economic, Social and Cultural Rights
Guarantees on Income Support
The Constitutional Court, which took a very strong constitutional duty stance, incorporating the responsibility to address colonial and apartheid continuities regarding racialised, gendered and intersectional disparities in livelihood opportunities and social security, assessed the state’s reluctance to extend social security benefits for injuries at work to a domestic worker against the state’s international human rights obligations and constitutional obligations. These flow from the (substantive) equality duty and social and economic rights (socio-economic) obligations. Guided by section 233 of the Constitution, which directs that applicable international law guardrails that should be leaned on in interpreting rights in the Constitution, the Constitutional Court stated:
“Social security is recognised as a human right in the Universal Declaration of Human Rights (Declaration). Article 22 of the Declaration provides that “[e] everyone, as a member of society, has a right to social security”. Article 25 (1) of the Declaration provides that “[e] everyone has the right...to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond [their] control”. In addition, Article 9 of the International Covenant on Economic, Social and Cultural Rights (ICESCR) provides that “[t]he state parties recognise the right of everyone to social security, including social insurance”.
Article 13 of the Maputo Protocol entitled “Economic and Social Welfare Rights” requires states parties to “adopt and enforce legislative and other measures to guarantee women equal opportunities in work and career advancement and other economic opportunities. In this respect, they shall:
...
(f) establish a system of protection and social insurance for women working in the informal sector and sensitise them to adhere to it” [footnotes omitted]
It must be further noted that article 22 of the Universal Declaration of Human Rights (UDHR, 1948) links social security and social assistance to human dignity and the free development of a person’s personality, which links to the Preamble of the Constitution to free the potential of each citizen and improve the quality of life of each person. In this regard, article 22 states:
“Everyone as a member of society has the right to social security and is entitled to realisation, through national effort and international cooperation and in accordance with the organisation and resources of each State, of the economic, social and cultural rights, indispensable for his dignity and the free development of his personality” [emphasis added]
From the perspective of an SRD Grant or ISG, note must be taken of the fact that article 25 of the UDHR does not distinguish or discriminate against those suffering income insecurity because of unemployment in comparison to those in similar circumstances because of sickness, disability, widowhood, old age, etc. Section 25 states:
“Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control”6
At the domestic level, the Constitution has various provisions that lay the foundation for mandatory advancement of social justice and related equality and similar economic and social rights provisions to those in articles 22 and 25 of the UDHR. Key for the purposes of the SRD or ISG is section 7, which states that “The state must respect, protect, promote and fulfil the rights in the Bill of Rights.”
The rights the state is enjoined to respect, promote and fulfil are all human rights, which include the right to equality (s 9), the right to human dignity (s 10), and applicable social and economic rights. The key equivalent to the UDHR’s articles 22 and 25 regarding social security and basic rights, such as the right to food, is section 27 which states:
“(1) Everyone has the right to have access to:
(a) health care services, including reproductive health care;
(b) sufficient food and water; and
(c) social security, including, if they are unable to support themselves and their dependants, appropriate social assistance.
(2) The state must take reasonable legislative and other measures, within its available resources, to achieve the progressive realisation of each of these rights.”7
Where children’s rights are part of the ecosystem, the rights in section 27 should be read with section 28, which enshrines specific guarantees for children. Worth noting regarding the SRD or ISG is section 28 (c), which enshrines a right “to basic nutrition, shelter, basic health care services and social services.” While these are taken care of through grants such as the child grant and the foster grant, a lack of basic income for the family may compromise the full value of a child grant as all in that family might depend on the child grant.
3.3. Limitation of Rights as a Circumscribed Shield
It must be borne in mind that both international law and the Constitution anticipate and regulate the limitation of rights, including those relating to social security and social assistance, in appropriate circumstances. For example, section 36 of the Constitution outlines basic guardrails for permissible limitation of rights, while section 39 (2) mandates seeking guidance from applicable international law for guidance. The social and economic rights in section 27 are further subject to internal limitations that include progressive realisation and availability of resources, including progressive realisation and resource availability.
However, this is not a limitless shield for avoiding accountability for arbitrary curtailment of these rights. In Grootboom, the Constitutional Court stated:
“This case shows the desperation of hundreds of thousands of people living in deplorable conditions throughout the country. The Constitution obliges the State to act positively to ameliorate these conditions. The obligation is to provide access to housing, health-care, sufficient food and water, and social security to those unable to support themselves and their dependants. The State must also foster conditions to enable citizens to gain access to land on an equitable basis. Those in need have a corresponding right to demand that this be done.
I am conscious that it is an extremely difficult task for the State to meet these obligations in the conditions that prevail in our country. This is recognised by the Constitution which expressly provides that the State is not obliged to go beyond available resources or to realise these rights immediately. I stress however, that despite all these qualifications, these are rights, and the Constitution obliges the State to give effect to them. This is an obligation that Courts can, and in appropriate circumstances, must enforce.” (Grootboom, 2001: paras. 93-94)8
Regarding impediments to implementation, the Constitutional Court’s view in Minister of Health v Treatment Action Campaign (2002: para. 26) (“TAC 2”), the Constitutional Court cited with approval, the Nations Committee on Economic, Social and Cultural Rights’ guiding statement on the concept of the “minimum core of obligation that a State party to the International Covenant on Economic, Social and Cultural Rights, should comply with and which states:
“a State party in which any significant number of individuals is deprived of essential foodstuffs, of essential primary health care, of basic shelter and housing, or of the most basic forms of education is, prima facie, failing to discharge its obligations under the Covenant. If the Covenant were to be read in such a way as not to establish such a minimum core obligation, it would be largely deprived of its raison d’être. By the same token, it must be noted that any assessment as to whether a State has discharged its minimum core obligations must also take account of resource constraints applying within the country concerned. Article 2 (1) obligates each State party to take the necessary steps ‘to the maximum of its available resources’. In order for a State party to be able to attribute its failure to meet at least its minimum core obligations to a lack of available resources it must demonstrate that every effort has been made to use all resources that are at its disposition in an effort to satisfy, as a matter of priority, those minimum obligations.” (CESCR General Comment No. 3, 1990: para. 10)9
While recognising the constraints within which policy choices the state must make regarding expenditure on competing demands, evolving Constitutional Court jurisprudence emphasises constitutional obligations and the need to exhaust all resources and administrative opportunities to deliver on such obligations. In TAC 2, the Court stated:
“We are also conscious of the daunting problems confronting government as a result of the pandemic. And besides the pandemic, the state faces huge demands in relation to access to education, land, housing, health care, food, water and social security. These are the socio-economic rights entrenched in the Constitution, and the state is obliged to take reasonable legislative and other measures within its available resources to achieve the progressive realisation of each of them. In the light of our history this is an extraordinarily difficult task. Nonetheless it is an obligation imposed on the state by the Constitution.” (TAC 2, 2002: para. 94)
Given the President’s undertaking in the SONA that the government intended to improve the SRD grant “as the next step towards income support for the unemployed”, it appears that one question to be answered is what would be a fair increase. The second question concerns a proficient way of translating the SRD into an ISG for the unemployed. The third question is: what revenue streams can be leveraged to support the grant? There is a possibility that the question is not settled, though in that the undertaking seems limited to unemployed people, whereas some may be employed but receiving income below the poverty level, which raises the perennial question of considering a Universal Income Grant (UBIG) as espoused by the IEJ.
When assessing arguments against increasing the ISG, government may have to bear in mind its own arguments in justifying a taxpayer-funded pension fund for public office bearers purely because they were legally denied an opportunity to contest elections in 1995 and its human rights and equality duty bearer status regarding affording all some income support as enjoined by section 27 of the Constitution read with sections 7, 9 and 39. In so doing, the Mahlangu guidelines can offer some assistance as Mahlangu is far more instructive regarding permissible and impermissible arguments regarding administrative and fiscal difficulties in the delivery of social security and social support. What follows is an analysis of the situation and possible answers to these questions.
4. Affordability of SRD or ISG Grant and Potential Revenue Streams for Short-Term and Long-Term Funding
4.1. Locating Income Security Support in the Constitutional
Equality Duty
There is no gainsaying the reality that there is not enough money to support 9 million people currently supported under the grant, whose number may grow given the fact that poverty grew from 55.5% to 62.6% during COVID-19 (World Bank, 2024). According to a recent SRD Grant High Court judgment, about “18.3 million people are within the eligible age group with income below the threshold” (Institute for Economic Justice v Minister of Social Development, 2025).
While pragmatism and fiscal prudence are unassailable principles in the distribution of state revenue, it must be borne in mind that constitutional governance and accountability dictate that all decisions and actions in the exercise of state power and control over public resources must put constitutional duties and values first. It is the old wisdom of you are your debts first.
The constitutional duty first paradigm rings throughout Constitutional Court jurisprudence, key cases in this regard being Van Heerden, the TAC cases and Mahlangu. At the core of the Constitutional Court jurisprudence is transformative constitutionalism, which includes arresting unjust continuities and healing the divisions of the past, as affirmed in Makwanyane. Regarding implications for social security and assistance, as entailed in the SRD grant or ISG or BIG, the philosophical leaning government is enjoined to adhere to, shines through in Mahlangu, where the Court said:
“In Khosa this Court held that equality is a foundational value which must inform the interpretation of the Bill of Rights, including the right to have access to social security. The Constitution itself makes it clear that socio-economic rights must be bestowed on an equal footing by declaring that those rights are held by “everyone”.
The approach to interpreting the rights in the Bill of Rights and the Constitution as a whole is purposive and generous and gives effect to constitutional values including substantive equality. So, when determining the scope of socio-economic rights, it is important to recall the transformative purpose of the Constitution which seeks to heal the injustices of the past and address the contemporary effects of apartheid and colonialism”10
Equally worth noting is that Makwanyane instructs that the constitutional values of fidelity must drive all public policy decisions and that the constitutional values need to be interpreted through the lens of the concept of ubuntu11. This includes equal valuing of all human beings within an ecosystem of shared humanity that incorporates social justice and human solidarity.
What is clear from the foregoing is that the state has a duty, under international law and the Constitution, to assist those without any or who have inadequate income for well-being and dignity commensurate with a decent standard of living. It is also clear, as may be noted in cases such as TAC 2 and Mahlangu, that the affordability test cannot be merely passed by simply saying there is not enough money. For the government “to be able to attribute its failure to meet at least its minimum core obligations to a lack of available resources it must demonstrate that every effort has been made to use all resources that are at its disposition in an effort to satisfy, as a matter of priority”. (CESCR General Comment No. 3, 1990: para. 10)12
The CSJ’s considered view is that on the Mahlangu test in particular, the government has a duty to extend and improve the SRD’s value and convert it into an ISG or BIG expeditiously. Government must also consider that international law and the Constitution make no distinction between inability to earn an income because of disability, old age and unemployment. It also does not make sense, from an equality point of view, that the restitutive paradigm underpinning Van Heerden cannot be extended to destitute ordinary South Africans to free their potential while fostering their dignity. From Sen’s standpoint, the grant can also contribute to a freed potential.
4.2. The Value-Add Question Regarding the SRD Grant at Odds with Constitutional Fidelity
What value does an SRD grant add to society, many economists, particularly those embedded in corporate institutions, ask? One of the sceptics in this regard is Standard Bank economist Goolam Ballim (Moneyweb, 2023). Indeed, some have advised its discontinuation because of studies they conducted that show it does not add any value to the economy and that its contribution to successful job seeking is negligible. Some even argue that most grant recipients use the grant wastefully on things such as alcohol, and that value could be best extracted through channelling the grant through retail vouchers or converting it into a family grant or increasing the child grant (Bhorat & Francis, 2022).
The question regarding whether the SRD grant or its successor has evidence-based value-add is at odds with the Constitution. Section 27 of the Constitution dictates that the state should enable people to provide for their social security and that when they cannot, social assistance should be provided within available resources. It does not say such assistance is conditional on adding economic value. The promise to unemployed persons and all persons unable to provide for themselves due to no fault of theirs is that the state must assist them on the same basis as people with disabilities or who are old or unwell. There is no legal or constitutional basis for demanding that the grant should yield economic value. There was no such demand regarding pension assistance to public office bearers in Van Heerden, and no such requirement was considered in Mahlangu.
Accordingly, the SRD grant is currently wrongly justified or rejected on economic value-add as its basis is as a constitutional and human rights debt that the state owes to each person in terms of section 27 by virtue of being a human being. It should also be discussed as a matter of equality and, consequently, social justice in that there is no rational basis for unfairly discriminating against those who have no income because they are unemployed in comparison to those without income due to disability, age, or other considerations for social grants whose justification is currently not being impugned or questioned.
4.3. Paradigm Shift to Systems Thinking in Considering the SRD Value-Add Questions
Even if the value-add factor is considered, constitutional supremacy, requires that is be treated as an important but subsidiary matter. In any event, the arguments against and data used to reject it tend not to adopt a systems approach to anchors of a healthy and sustainably growing economy and a functional society, or good society as Rawls sees the ideal society.
In the Day of Social Justice statement of 2023, the UN Secretary-General asserted that:
“Social justice makes societies and economies function better and reduces poverty, inequalities and social tensions. It plays an important role in attaining more inclusive and sustainable socio-economic development paths and is key for reaching the Sustainable Development Goals (SDGs) of the 2030 Agenda for Sustainable Development (2030 Agenda), especially at a time when the achievement of those goals remains far away.” (Guterres, 2023)
While others look at the direct and linear correlation between the receipt of the SRD grant and finding employment or starting a business, many non-linear benefits derive from the socio-economic systemic impact of direct cash transfers to individuals. The CSJ and partners outlined some of these in the Policy Brief prepared to alert the government to the predicted unintended harm of severely restrictive COVID-19 regulations, such as redirecting commerce away from township economies to big supermarkets and online orders (Centre for Social Justice, 2020). The Policy Brief was informed by a tool called the social Justice Impact Assessment Matrix (SIAM)13.
The Policy Brief recommended a cash grant instead of vouchers for food parcels, arguing that the voucher system tended to disadvantage local economies while reinforcing the advantages of big supermarkets by directing commercial transactions that used to go to local informal convenience stores and “spaza shops”, to them. The voucher system also reinforces historical disparities as big supermarkets tend to be in historically advantaged areas and/or owned by historically advantaged groups. Mainstream trade also tends to be dominated by men, thus reinforcing the accumulated disadvantages of women who tend to cluster in informal trade. In other words, one indirect value-add of the SRD as a cash transfer is democratising commercial opportunities in ways that support local economies and the informal trade sector, which includes predominantly women traders in spaces such as taxi and bus ranks14.
The systemic impact also includes healthier individuals, including healthier children and fewer undernourished or stunted children whose child grant would not be depleted by supporting family needs without any other income. Healthier individuals mean less spent on medical and disability costs downstream. There are also better outcomes in education as these amounts are pooled together for data, energy, etc. In this regard, the SRD grant and its successor indirectly contribute to food security and the alleviation of hunger.
4.4. Direct Economic Benefits of Income Security-Related Cash Transfers
There are divergent results by different economists on commonly studied indicators, such as the impact of reducing unemployment primarily through beneficiaries being propelled to find jobs or start small businesses. This attests to the fact that economists are not ideological virgins. Views are, as Sen points out, ideologically influenced.
A study by Bassier and others (Bassier et al., 2021) reports a number of positive spinoffs from the cash transfers entailed in the SRD grant among the most marginalised groups. Key to the finding, is improved resilience to shocks such as COVID-19 and regulations that sought to curb it. Others have, as indicated earlier, expressed concern over cash transfers on trivial things such as alcohol. However, it cannot be true that such group constitutes the majority.
The Bassier study is also highlighting the restitutive function of the SRD grant in so far as the fact that it has been a reparative cash transfer to informal sector workers who lost everything but could not access the other relief measures as they were tailored with formal businesses in mind who are registered with the revenue services, Unemployment Insurance Fund and other business regulatory systems. This view resonates with the Constitutional Court’s view in Mahlangu. Many who argue against the SRD grant and its successor seem oblivious to the reality that the systemic after-shock of lockdown rules is still being felt four years on.
Many opposed to extending the grant seem unaware that, due to unifocal instead of multifocal tailoring of such support, which in gender mainstreaming and gender budgeting terms is often labelled “man-size fits all”, the majority of informal businesses were never helped and accordingly did not bounce either back or forward. They ignore that attempts at rebounding for many were undermined by the disruptive impact of wars in Ukraine, Gaza, and other places15. Many former employees of such businesses remain on the grant to this day.
5. How Will the SRD and a Future ISG Be Sustainably Funded?
5.1. The Cost of the SRD Grant and an Inflation-Sensitive Increase
Since the President promised an improvement to the SRD grant in his SONA, as alluded to earlier, the question that arises is what would be a fair rather than a Potemkin improvement?
The Minister of Finance eventually announced in his Budget Speech that the SRD grant would only be increased by R20 to R370. This cannot be meant to be a fair increase, considering that there has been zero inflation adjustment since the grant was introduced based on the cost of a food parcel, which was R350 at the time. The same food parcel today cannot be procured for less than R450. The Policy Brief recommended topping up the grant with R150 per person, taking it to R500. This anticipated further food price inflation due to continuing shocks such as wars in Ukraine, Gaza, and other ecosystem shocks, with implications for income opportunities and food price inflation. The IEJ recommended a food inflation-based R444 or R467 as an interim measure to be increased on conversion to a BIG.
Suggestions of conversion to a family grant are unrealistic given the broken family structure in South Africa, which for the majority was by design as part of the racially stratified architecture of the extractive and apartheid economy that, according to Mahlangu, rested on the backs of Black women. Considering patriarchal power relations, this could exacerbate gender inequality while escalating gendered family conflict, including gender-based violence (“GBV”). The argument also goes against the concerns that the SRD grant is abused, which means a whole family grant could be abused by the proxy recipient.
A major pressing question has centred on sources of revenue for continuing and improving the grant, a valid concern given the stagnant economy with a small taxpayer base if you exclude the 15% Value Added Tax (VAT) and the fuel levy.
Proffered options include Wealth Tax. The IEJ’s proposed three revenue streams include additional taxation, among them Wealth Tax and Luxury Goods Tax, including online purchases, budget restructuring and additional debt.
The CSJ proposes four revenue streams to support the SRD grant and a future ISG, whatever form the latter takes. The recommended long-term proposal is a refined UBIG that does not cover everyone but has a reach beyond unemployed persons also covering so-called working poor, whose below-poverty-line earnings or seasonal work prevent them from living a decent life and freeing their potential as envisaged in Sen’s capabilities theory.
1) Recoup money from corruption, inefficiency, and wastage
The amount needed is a fraction of funds lost to corruption, bureaucratic inefficiencies, including failure to control public procurement budget overruns and wastage caused by duplication and hiring of unnecessary consultants and intermediaries in procurement. Literature on state capture16 literature reveals that billions were lost. Such can be recouped and leaking pipes closed, particularly in public procurement fraud and waste, particularly involving false billing, overbilling, overcharging and cost overruns. Innovations should include financial incentives and blockchain technologies for greater transparency and process tracking.
2) Rebate a portion of the lotto money to the SRD and future ISG fund
Poor people are major consumers in the state lottery system, yet nothing is ploughed directly back to them. A few might benefit from the grants given to non-profit organisations, but those tend to be urban and advantaged.
3) Additional tax
Wealth tax should be considered, as should windfall taxes.
Wealth Tax is a tax on an individual’s net worth, which targets accumulated assets e.g., property, investments, savings. Applied annually, typically at a low rate (e.g., 1%). Windfall Tax is a one-time tax on unexpected, excessive profits (e.g., from commodity booms or pandemics), targeting firms or individuals. Windfall tax’s collection is ad hoc. For example supermarkets enjoyed windfall income during COVID-19 due to the redirection of commerce from small, informal and non-digitised commercial entities. That sudden gain could have been the subject of windfall tax. It must be acknowledged though that is it is not that easy to track windfalls but artificial intelligence, which is being used by the South African Revenue Service (SARS), can be leveraged to expedite proficient tracking of wealth and income.
4) Restructure the economy to reduce the number of those who need income support
The economy needs restructuring to rapture the pyramid-shaped society which was consciously created by colonialism and apartheid to ensure an endless supply of what Stellenbosch University Professor Sampi Terreblanche (2002) referred to as unfree labour. A pyramid economy’s approach to income assistance ranges from those against it, such as Milton Freedman, to those believing that the growth of the economy will magically translate into full employment and shared prosperity, a myth debunked by economists such as Nobel Prize winner and former World Bank economist, David Stiglitz (2003: pp. 78-79).
From the ashes of the colonial and apartheid pyramid economy, a new diamond-shaped society should be progressively established. In a diamond-shaped society, there should be a few persons who are wealthy at the top but not unconscionably so. There should be a big bulge in the middle where the majority in society should be. There should be very few at the bottom who, due to misfortune, may be unable to work or earn an income, thus reducing the number of persons to be supported. The transformation of South Africa into a diamond society needs a paradigm shift from creating jobs to opening up all levels of the economy to all on an equitable and remedial basis. The approach should include creating decent work opportunities as envisaged in the ILO conventions, which include extending social security to the informal sector. This also requires recapacitating rural areas to become productive again from subsistence farming to small-scale farming and online-dependent industrialisation backed by investment in rural infrastructure, including information and communication technology infrastructure.
5.2. Replace the Inherited Racialised Pyramid Economy with an Inclusive Diamond Society to Reduce Social Support
Dependency
At the core of the debate regarding the SRD and any future ISG, are different world views regarding the distribution of the fruits of human co-existence and social cooperation. The social justice world view, since the coining of the concept in the 19th century, has been grounded on fairness to all. Worth noting, is that concepts such as justice, fairness and equality have displayed enormous plasticity as the world awakens to the equal humanity of all as envisaged in ubuntu (Madonsela, 2022).
The Policy Brief moved from the premise that there are two dominant views of society. The key dividing line is between those who believe a country is an economy where what matters most is economic growth within which human beings are only seen as one of the resources and those who believe countries are human societies whose key success indicator is human well-being with the economy being a key anchor of such human well-being. Social justice is anchored in the latter.
The CSJ believes the transformative ethos underpinning South Africa’s constitutional blueprint demands abandoning the conception of South Africa as a pyramidic economic entity to a well-being society under construction which is equally anchored in shared humanity and prosperity. This is very clear in the Constitution’s preamble and Constitutional Court jurisprudence.
A key and long-term revenue stream for the SRD grant and a future ISG is the transformation of society and the economy to reduce the number of people who need or are dependent on income support by freeing the potential of all persons to be productively engaged in work. This should include unlocking the structural inefficiencies manufactured by colonial and apartheid laws that sought to disrupt Black self-sufficiency. This requires rebooting subsistence and wealth-enhancing activities such as small-scale farming of crops or livestock in rural areas and self-employment in vibrant, enterprising communities in urban areas (Ibid, pp. 174-177)17. This would contribute to creating a diamond-shaped society with a bulging middle while being thin at the top and bottom.
6. Mainstream Social Justice and Constitutional Governance
The grant debacle is not a reflection of government’s unwillingness to help poor people but rather different theoretical frameworks on who needs solidarity income assistance funding when in need and what is the legal and moral basis for such assistance. This is compounded by challenges in generating the revenue required to fund the additional demands on the national fiscus imposed by such.
CSJ’s view is that the debate tends to be muddied at the very outset by lack of constitutional governance and accountability grounding. Both justifications and rejection tend to focus on economics. Even then the focus tends to be limited to direct, concretely measurable, as opposed to systemic economic impact. The CSJ proposes a resetting of the conversation on the SRD grant and grounding it on constitutional fidelity, including the constitutional commitment to establish a socially just society where all equally enjoy all human rights, including social and economic rights, with every citizen’s life improved and every person’s potential freed. It also proposes a systems thinking and design based approach to change.
A constitutional governance and accountability centred approach to policy questions, be they economic or social, cannot ignore economic questions as human rights needs cannot be met through pie in the sky. However, one question that should not be a determinant of continuity and amount of the grant is its value-add as that discriminates against poor people who are not disabled persons, infirmed, children or older persons without a constitutional or rational basis for such. The only time a person could be rationally excluded would be if there was evidence of them declining employment, a test most countries that provide income support apply while taking responsibility for organising agencies that alert grant applicants about employment opportunities.
To make constitutionally congruent and equity impact-conscious policy design easier in the future, the CSJ recommends the subjection of all planned policies, laws, and programmes to the SIAM test. The test is an innovative simulation model that used disaggregated data to predict and endeavour to prevent unintended adverse consequences of facially neutral policies, laws, programmes and budgets on disadvantaged groups thus exacerbating poverty and inequality. Plans are in progress to digitise the SIAM process by leveraging data science to simulate the future in a social lab and change policies or include a poverty and inequality impact mitigation strategy upfront. The SIAM model dictates that the following eight questions be asked and answered using disaggregated data before signing off on any planned policy, law, programme or budget:
1) Constitutional Objectives Congruence: What is the purpose of the planned or existing policy/decision/law, and is it congruent with constitutional objectives and values concerning the achievement of substantive equality or social justice and the advancement of human rights for all?
2) Clarification of Target Beneficiary: Who or what group is the targeted or main beneficiary of the policy/decision/law?
3) Fair Differentiation: Does the policy/decision/law differentiate or treat everyone on a one-size-fits-all basis or differentiate responsively, and in this regard, what data has been relied on, and is it sufficiently disaggregated in terms of the constitutional grounds of prohibited discrimination, including overlaying grounds and has the data been integrity assured?
4) Inequitable Advantage or Privilege: Does the policy/decision/law confer disproportionate advantage to any group identified in terms of one or more of the grounds in the Constitution (16 listed plus any analogous ground), or does it disproportionately withhold advantage or privilege to any group identified in terms of the constitutional grounds?
5) Restitution: Does the policy/decision/law advance or reduce historical disadvantage with a view to advancing equality, including equal enjoyment of all human rights and freedoms as envisaged in section 9 (2) read with section 7 (2) of the Constitution?
6) Availability of Less Harmful Alternatives: If the policy/decision/law disproportionately advantages and disadvantages a group or groups identified in terms of constitutional grounds, how important is it, and can its purpose be achieved through less intrusive means?
7) Mitigation Strategies: If the purpose cannot be achieved through alternative means, what compensation measures have been built in to offset the disproportionate disadvantage to one or more groups or a combination thereof?
8) Meaningful Engagement: Have all affected groups been consulted or involved in the policy design and afforded opportunities to influence the design and possible rethinking of potentially unduly harmful impact?
7. Conclusion
President Nelson Mandela, who was the inaugural President of democratic South Africa and who drove the first attempts at transformative constitutionalism through the implementation of the interim Constitution until 1997 and the current Constitution from there on, once opined that:
“…social ills… are not a pre-ordained result of the forces of nature or the product of a curse of the deities. They are the consequence of decisions which men and women take or refuse to take…” (United Nations, 2023)
The significance of the paper is to make a socio-legal case for a support income grant as a pragmatically attainable constitutional and human rights imperative. It shines a spotlight on the inadequacy of economic debates that shape fiscal policy using the South African SRD Grant debate as a case study. The study exposes the fact that by failing to lace the debate in constitutional and international human rights debates, policy choices are made that have severe unintended consequences on the fulfilment of human rights particularly social and economic rights. The paper further provides insights on specific normative standards that have a bearing on income support, arguing that these should undergird the selection of policy pathways in any field of government endeavour including fiscal policy generally and the SRD Grant and /or income support policy for unemployed adults or adults without income of their own or state grants. It dispels some of the myths and offers insights on how the Grant has potential to reduce income and poverty gaps with some restitutive impact on the socio-economic legacy, whilst supporting the informal economic system of local economies in underprivileged communities. It encourages a widened search for revenue sources for redistributive justice as an element of social justice and transformative governance. It also calls for systematisation of anticipatory impact assessment science to whittle out policies with severe unintended consequences on social justice and select policies that are more congruent with social justice and human rights obligations. It introduces a tool called the Social Justice Impact Assessment Matrix as a potential game changer in the SRD debate and broader fiscal policy design processes. Ultimately, the paper highlights the interface between law and economics, emphasising the need to ground economic theory in appropriate legal contexts.
It is constitutionally desirable and economically possible to extend and improve the SRD grant while making it permanent as a form of ISG and possibly the national BIG. The answer lies in anchoring the debate in constitutional governance and accountability, whose obligations include advancing social justice and respecting, promoting and protecting human rights, including the right to social security as envisaged in section 27 and the right to equality in section 9.
The money can be found in the system. In any event, the couple of billions of rands required is not much in the grand scheme of things. Furthermore, this direct cash transfer measure has restitutive potency for both lockdown and apartheid imbalances. It can also be a major game changer in reshaping the legacy pyramid economy towards progressively becoming a diamond society, thus lessening the welfare burden. In addition, it has some impact on multidimensional poverty and improved agency for recipients. It is also a good investment in peace and stability, anchored in shared prosperity. The paradigm shift ultimately requires reimagining South Africa into a truly developmental state anchored in ubuntu, human rights and sustainable development values, where the rule of law thrives.
Funding
The paper was made possible by the research funding to the CSJ, which is mostly from the Stellenbosch Vice Chancellor Prof Wim de Villiers’ Strategic Fund and the Law Faculty Trust.
NOTES
1Gender budgeting is a praxis that involves integrating gender and related intersectional considerations in the budget process.
2Per O’Regan J.
3https://www.saflii.org/za/cases/ZACC/1998/15.html.
4Here Ngcobo J said: “[O]ur Constitution differs from other constitutions which assume that all are equal and in so doing simply entrench existing inequalities. Our Constitution recognises that decades of systematic racial discrimination entrenched by the apartheid legal order cannot be eliminated without positive action being taken to achieve that result. We are required to do more than that. The effects of discrimination may continue indefinitely unless there is a commitment to end it.
5Emphasis added.
6Emphasis added.
7Emphasis added.
8Emphasis added.
9Emphasis added.
10Footnotes omitted and emphasis added.
11Note the judgments of Langa Madala J, Mahomed, Sacks J and Mokgoro J. Particularly instructive is Madala J’s assertion that social justice is a dimension of ubuntu and that it has a restitutive dimension (para 271 whereafter mentioning the reconciliation ethos of ubuntu, which includes restitution, he states that: “[t]he concept (of ubuntu) that permeates the Constitution generally … (and) … carries in it the ideas of humaneness, social justice and fairness…”
12See TAC 2 as cited earlier. Also note Mahlangu.
13SIAM was designed by Prof Thuli Madonsela in 2020 to facilitate leveraging data analytics to predict the likelihood of facially neutral laws, policies and programmes impacting disparately on disadvantaged social groups thus exacerbating poverty and inequality as an unintended consequence.
14These matters are canvassed in several submissions of the CSJ and SCOPRA on Covid-19 regulations.
15Such cases abound in a soon to be released CSJ Report provisionally titled: Equity Mapping and The Social Justice Impact of Covid-19 Regulations and Relief Policies: Lessons for The Swartland Piloting of The Social Justice Impact Assessment Matrix between 2020 and 2023.
16The concept of state capture was popularized in the report of the Public Protector titled State of Capture (2016).
17This is primarily based on S Terreblanche A History of Inequality in South Africa 1652-2002 (2002).