Modelling fiscal pathways to a basic income

This fact sheet by the Institute for Economic Justice (IEJ) presents the results of macroeconomic modelling conducted with Applied Development Research Solutions (ADRS) regarding the fiscal viability of a Basic Income Grant (BIG) in South Africa from 2023 to 2030. The document argues that a BIG is affordable and sustainable, potentially increasing GDP growth and reducing poverty without compromising the country's fiscal position.

• Modelling of three different BIG pathways (low, medium, and high ambition) from 2023 to 2030 indicates that a basic income is fiscally sustainable and positively impacts growth, poverty, and unemployment in South Africa.
• The implementation of BIG pathways is projected to increase GDP growth from a baseline of 2.2% to between 2.8% and 3.5% by 2030, while reducing the poverty rate by up to two-thirds over eight years.
• A Universal Basic Income Guarantee (UBIG) paid to all adults aged 18 to 59 at the 2022 Food Poverty Line (R624 per month) would have a gross annual cost of R255 billion, though actual costs would be lower due to an estimated initial uptake of 60% to 80%.
• The net cost of a UBIG could be as low as 50% of the gross cost because the government recoups funds through VAT (approximately 12% of grant spending), increased economic activity (the multiplier effect), and a social security tax (SST) which could cover about 25% of the cost.
• Proposed progressive financing mechanisms to fund a UBIG include a wealth tax on the top 1% (potentially raising R143 billion), a 25% VAT on luxury goods (averaging R9 billion annually), a Financial Transactions Tax of 0.1% (R41 billion annually), and a Resource Rent Tax (over R38 billion per year).

APA

Institute for Economic Justice (2024). Modelling fiscal pathways to a basic income. https://www.iej.org.za/wp-content/uploads/2024/02/IEJ-UBIG-8-factsheet-English.pdf

Chicago

Institute for Economic Justice. Modelling fiscal pathways to a basic income. 2024. https://www.iej.org.za/wp-content/uploads/2024/02/IEJ-UBIG-8-factsheet-English.pdf.

Wikipedia

{{cite report |author=Institute for Economic Justice |title=Modelling fiscal pathways to a basic income |date=January 2024 |url=https://www.iej.org.za/wp-content/uploads/2024/02/IEJ-UBIG-8-factsheet-English.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{instituteforeconomicjustice2024modelling, author = {{Institute for Economic Justice}}, title = {{Modelling fiscal pathways to a basic income}}, institution = {Institute for Economic Justice}, year = {2024}, month = jan, url = {https://www.iej.org.za/wp-content/uploads/2024/02/IEJ-UBIG-8-factsheet-English.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }