John Kane-Berman provided an interesting statistic in his Business Day piece, on “discouraged workers” — those out of work and available for work, but making no effort to find work. Their number has grown from 2,2-million in 2000 to 3,7-million in 2006.
All of these people will probably qualify for the basic income grant (BIG). I would suggest that the implementation of a big will erode the incentive to find employment to almost nil. Nazmeera Moola tackled the BIG in this week's FM. Her biggest issue is how the government is going to foot this bill on a sustainable basis. At the moment there is a budget surplus but what about the lean times?
Two solutions have been proposed:
- Raise VAT by 7% - YOU'VE GOT BE KIDDING !!!!!!!!! (my emphasis).
- Increase personal taxes by between 10 and 30%. She speculates that this will have a detrimental effect on foreign investment.
Moola writes very well, I recommend you read the article - A BIG question.
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