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Comments on Chapter 14 of Transforming the Present Protecting the Future: Report of the Committee of Inquiry into a Comprehensive System of Social Security for South Africa

Author: Conrad Barberton
Date: 2002-08-08

Download the full commentary.

In 2002 a Draft Final Report of the Committee of Inquiry into a Comprehensive System of Social Security for South Africa was released. This commentary is a response written to Chapter 14 of Financial Framework for Comprehensive Social Protection. Although factors in the Draft Final Report such as the provision of a universal Basic Income Grant are supported, some comments propose alternative suggestions and considerations to the costing of the Basic Income Grant and the process of developing intergovernmental functionality.

The Draft Final Report of the Committee of Inquiry into a Comprehensive System of Social Security for South Africa, and Chapter 14 in particular, sought to define the costs of implementing a universal Basic Income Grant (BIG) as a means to closing the gap in South Africa’s loosely woven social security net. In this commentary Cornerstone expresses overall support for the BIG concept and its socio-economic benefits, but focuses on the report’s attitude towards implementation issues, including the intergovernmental system.

Additionally, there was agreement that implementation of BIG would not be possible due to capacity and institutional constraints. Ultimately, the shared view is that a long-term strategy for the implementation of a comprehensive and integrated BIG is required.

The Committee, in Chapter 14, challenges the vertical definition of roles and responsibilities between national and provincial government. They suggest that division along policy and implementation lines is not intended by the Constitution, and that the national departments lose impetus with budgetary control. Cornerstone makes it clear that these concurrent functions – wherein the policy function lies at the national level and implementation in the hands of the provinces – does not constitute a systemic design failure, or an arbitrary allocation of responsibility. While the Constitution does not explicitly say that national government should be responsible for policy and provinces for delivery, this division is
clearly implied by the overall structure of the Constitution. The very existence of the National Council of Provinces, and the provinces themselves, concurrent responsibilities, a revenue-sharing mechanism, oversight responsibilities, and provisions governing the establishment of national norms and standards, all point to a division of responsibilities between national and provincial governments along policy and implementation lines. Thus arguing for a greater level of implementation by the national departments, based on the systemic failure of intergovernmental relations in the past, is not a viable course of action. The comments argue strongly for systemic development and the strengthening of intergovernmental co-ordination efforts in order to strengthen delivery efficiency.

Both the Committee and Cornerstone identify the problems associated with the budgeting through to implementation processes, but the suggested cause of this differs between the two parties. Whereas the Committee argues an ultimate loss of control, Cornerstone suggests that the national departments have in fact failed to play their constitutionally-intended oversight role: to foster intergovernmental relations based on good faith and supportive systems.

Possible causes listed by Cornerstone include: national policies are announced without proper consultation with the provinces; national departments are slow to assist provincial departments with their planning and budgeting; and national departments in the three social sectors have been weak in representing the interests of their sectors in the prioritisation and resource allocation processes in Government.

“They are more concerned about enlarging their own budgets, than about arguing for additional resources to be made available to the provinces for social services

It is also argued by Cornerstone that the national departments’ management of conditional grants does not confirm that their institutional capacity for efficient expenditure is necessarily better.

The problem of the Equitable Share giving no guarantee of being able to meet expenditure needs is outlined, a critique raised by the Committee. Cornerstone argues, however, that the buck stops, ultimately, at vertical budget allocations. Since the horizontal allocation is distributed by formulae, it is ultimately the total amount allocated to the provincial sphere that, if inadequate, can result in unfunded mandates. Cornerstone however argues that if provinces managed their resources more efficiently, they would find that they have more than enough funds to meet their core social service obligations.

In addition to this critique, Cornerstone, along with AFReC (Pty) Ltd, developed a checklist for consideration while planning to implement BIG. Included as an Appendix to the comments, it takes into account fiscal and macroeconomic implications, impact on poverty and inequality, labour market effects, social considerations, political effects and administrative considerations. This checklist defines critical economic and governance constructs pertinent to the implementation of large-scale provision of social services, and forms a list of recommendations for meaningful and committed implementation.