Income Grant Proposal on the Move

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By Wezi Tjaronda WINDHOEK The Basic Income Grant (BIG) proposal will now go to Cabinet following a meeting the BIG Coalition had with President Hifikepunye Pohamba yesterday. Evangelical Lutheran Church in the Republic of Namibia Bishop, Dr Zephaniah Kameeta told the press after the meeting that although the president did not commit himself, he would take the proposal to Cabinet. Kameeta said the meeting between the president and the coalition was held in an open and frank manner, which was encouraging. He said the president said he would take the proposal to cabinet to deliberate on. Other members of the coalition that accompanied the Bishop were the Secretary General of the Council of Churches Reverend Philip Strydom, Director of Legal Assistance Centre and Chairperson of the Namibia Non-Governmental Organisation Forum Norman Tjombe and the Director of ELCRN’s Desk for Social Development Dr Dirk Haarmann. The coalition has proposed that the government pays every citizen below the age of 60 (an age when they become eligible for old age pension) an amount of N$100 per month as a way of getting out of the poverty trap. With that amount, it is envisioned that HIV/AIDS patients will be able to buy food and eat before taking medicine, parents will be able to send their children to school and also be able to put food on their families’ tables. “If we want the ARV roll-out to succeed, which we so urgently need, so that the parents of today, the economic productive people, are not dying from AIDS, we need to have a Basic Income Grant. As with TB treatment, you cannot take AIDS treatment without having something to eat,” he added. The idea stems from the Namibia Tax Consortium (NAMTAX), which in 2002 proposed a universal grant to put Namibia on an economic path. Bishop Kameeta said a Basic Income Grant would help to avoid poverty traps, as it would give people resources to actively take part in the economy and not punish economic activity. He added that BIG was a simple but just way of redistribution, shifting the burden of caring for the poor more evenly over the whole society. “As the Basic Income Grant through its universality is fair in its distribution, it thereby allows to tap into Namibia’s access tax capacity and redistribute to the poor,” said Kameeta. Two studies that were done to determine how much it would cost the government to distribute the universal grant to its people found that between N$522 million and N$1.4 billion would be needed. Calculating the grant at N$70 per month financed through VAT would cost the government N$522 million per year according to government’s NAMTAX, while the Economic Policy Research Institute of South Africa, which calculated an amount of N$100 financed through a combination of income tax and VAT put the amount at $1.4 billion per year. This is based on a total population of 1.9 million people minus 10 percent who receive old age pensions and a further 40 percent of the households who are rich, whose value of the grant would be recuperated through tax. The BIG Coalition was formed last year after a conference early 2005, which deliberated on the scheme. The organisations that form part of the coalition are NANGOF, Namibia Network of AIDS Service Organisations (NANSO), CCN, and the National Union of Namibian Workers (NUNW). Two other individual organisations, LAC and the Labour Resource and Research Institute (LaRRI) are also members of the coalition. At the formation of the coalition, the four umbrella organisations had resolved that Namibia has extremely high levels of poverty and the highest income inequalities in the world. It also noted that poverty was a contributing factor to the spread of HIV and AIDS and was thereby undermining the country’s economic security and at the same time worsening poverty. It noted that BIG is a necessity to reduce poverty and to promote economic empowerment, freeing the productive potential of the people currently trapped in the vicious cycle of poverty.