BIG push:money for all idea on front-burner again

IN December 2002, a Basic Income Grant was proposed to Government.

In a nutshell, it proposes that each and every citizen between the ages of six and 60, regardless of sex, skin colour, educational qualifications or financial position, should get between N$70 and N$100 from the government every month. Just like that.The money would be recouped by Government through taxes; higher ‘sin’ and luxury taxes, for instance on booze or cigarettes.Tax rebates on basic necessities, such as bread, would mean the poorest of the poor get more bang for their buck, while the fat cats get less out of each dollar.The idea was first put forward by the NAMTAX Consortium, which the Government contracted to review its tax system in November 2002.The consortium was made up of consultants from the University of Namibia and Tax Consulting Services Namibia, a private company in Namibia.As the consortium put it:”The net effect of such an approach would be the same as paying a progressively higher anti-poverty grant to all Namibians whose monthly per person expenditure is lower than about N$1 100, and to progressively tax those with a higher per person monthly expenditure.”What’s more, the report stated that:”The automatic targeting achieved by this scheme overcomes all the inefficiencies of traditional poverty relief grants.”That means that nobody can rob the system, get grants they are not entitled to, or do any of the other things that make current attempts at state welfare ineffective.”About N$500 million would be redistributed annually, targeted at the poorest,” the official report reads.At a conference held on the outskirts of Windhoek last week, the Evangelical Lutheran Church in the Republic of Namibia (ELCRN), took steps to start a national debate about the Basic Income Grant by inviting financial experts, churches, Government officials and non-governmental organisations for discussions on poverty, HIV-AIDS and the grant.There Bishop Zephania Kameeta spoke passionately about the need to alleviate poverty in Namibia.His church maintains that:”There are alternatives that are less expensive, like only supporting children up to the age of 17.However, these alternatives are also less effective and many people would still be left without any support.”Professor Pieter le Roux of the University of the Western Cape explained the BIG to those present, pointing out that it would “not eradicate poverty, but can eradicate destitution” in Namibia.Robin Sherbourne of the Institute for Public Policy Research said the idea is still very radical and has not been implemented anywhere else in the world.Nevertheless, it would address the defects his research has identified in the current systems, which include the limited coverage of current grants, the lack of social workers to administer grants, demanding application procedures and grants to people who are not poor.The problems with current systems stem from effective targeting of the relief, while the BIG would target automatically by rewarding spending on necessities and taking back more of the money spent on luxuries.However, Sherbourne showed what a major fiscal undertaking the BIG would be for Government.For example, giving N$100 a month only to the 781 000 Namibian children under 15 years old would already mean expenditure of N$937 million.The Congress of Democrats endorsed the grant idea last Thursday and has included it in its 2004 election campaign manifesto.Just like that.The money would be recouped by Government through taxes; higher ‘sin’ and luxury taxes, for instance on booze or cigarettes.Tax rebates on basic necessities, such as bread, would mean the poorest of the poor get more bang for their buck, while the fat cats get less out of each dollar.The idea was first put forward by the NAMTAX Consortium, which the Government contracted to review its tax system in November 2002.The consortium was made up of consultants from the University of Namibia and Tax Consulting Services Namibia, a private company in Namibia.As the consortium put it:”The net effect of such an approach would be the same as paying a progressively higher anti-poverty grant to all Namibians whose monthly per person expenditure is lower than about N$1 100, and to progressively tax those with a higher per person monthly expenditure.”What’s more, the report stated that:”The automatic targeting achieved by this scheme overcomes all the inefficiencies of traditional poverty relief grants.”That means that nobody can rob the system, get grants they are not entitled to, or do any of the other things that make current attempts at state welfare ineffective.”About N$500 million would be redistributed annually, targeted at the poorest,” the official report reads.At a conference held on the outskirts of Windhoek last week, the Evangelical Lutheran Church in the Republic of Namibia (ELCRN), took steps to start a national debate about the Basic Income Grant by inviting financial experts, churches, Government officials and non-governmental organisations for discussions on poverty, HIV-AIDS and the grant.There Bishop Zephania Kameeta spoke passionately about the need to alleviate poverty in Namibia.His church maintains that:”There are alternatives that are less expensive, like only supporting children up to the age of 17.However, these alternatives are also less effective and many people would still be left without any support.”Professor Pieter le Roux of the University of the Western Cape explained the BIG to those present, pointing out that it would “not eradicate poverty, but can eradicate destitution” in Namibia.Robin Sherbourne of the Institute for Public Policy Research said the idea is still very radical and has not been implemented anywhere else in the world.Nevertheless, it would address the defects his research has identified in the current systems, which include the limited coverage of current grants, the lack of social workers to administer grants, demanding application procedures and grants to people who are not poor.The problems with current systems stem from effective targeting of the relief, while the BIG would target automatically by rewarding spending on necessities and taking back more of the money spent on luxuries.However, Sherbourne showed what a major fiscal undertaking the BIG would be for Government.For example, giving N$100 a month only to the 781 000 Namibian children under 15 years old would already mean expenditure of N$937 million.The Congress of Democrats endorsed the grant idea last Thursday and has included it in its 2004 election campaign manifesto.