2 October 2008
A new report released by the Presidency has found that there has been a reduction in both absolute income poverty, which is the income of poor people, and in relative income poverty, which is the gap between the average income of poor people and the poverty line.
The report, entitled “Towards a Fifteen Year Review Synthesis Report”, reviews the government’s successes as well as shortcomings and challenges over the last 15 years, and investigates the impact of government programmes in improving the lives of South Africans.
“What we have established is that income poverty has actually declined, contrary to conventional wisdom,” policy coordination and advisory services head Joel Netshitenzhe told reporters at the Union Buildings in Pretoria this week.
“When using the R322 per person [per month] poverty line, in 1995 about 53% of households was living below that line. In 2005, that figure has decreased to 48%.”
Netshitenzhe added that when using the lower poverty line measure of R174 per person a month, the number of households in 1995 stood at 3%, decreasing in 2005 to 2%.
Various studies have confirmed that social grants were well targeted and contributed considerably to poverty reduction. Of social grants, the report indicated that 62% of the total went to the poorest 40% of households, and 82% to the poorest 60%.
“Social grants have played a very critical role in this regard . from 2.5 million beneficiaries in 1999 to just over 12 million in 2007, the social grants system is the largest form of government support for the poor,” Netshitenzhe said. “Most by far is in the form of the child support grant, which reached 7.8 million beneficiaries in 2007 compared to 34 000 in 1999.”
The Department of Public Works also has programmes which are aimed at assisting with fighting poverty and assisting in income generation. While the Expanded Public Works Programme did absorb a large number of unskilled labourers, the report found that challenges remained, in that the projects were of short duration and training was often inadequate.
“The targets in 2004 were to create one million work opportunities by 2009 . that target had already been met by April 2008,” he said. “There is the challenge that these [work programmes] are of short duration and the training that is meant to take place is not taking place at the optimum level.”
Widening inequality gap
Despite the decrease in the amount of poor people in the country, Netshitenzhe noted that many studies, including the Income Expenditure Survey by Statistics South Africa found a widening inequality gap in the country.
While many poor South Africans were lifting themselves from abject poverty, the rich in South Africa were getting richer, most likely due to access to economic opportunities.
“In terms of macro-social trends, a high level of economic growth has exposed one reality that we believe society needs to take to heart . that a higher rate of growth does not necessarily result in a reduction in inequality,” he said, adding that in recent years, inequality especially amongst racial groups, except among Africans, had not been reduced.
Netshitenzhe explained that during periods of high rates of growth it was those who were already well-off who were better positioned to take advantage of that growth.
Even if absolute conditions of people might be improving, he said that the fact that the upper income groups were experiencing a faster rate of improvement in their conditions started to create a sense of relative poverty in lower income groups.
Even if absolute conditions of people might be improving, the fact that those who are on the upper rim are experiencing a faster rate of improvement in their conditions, it starts to create a sense of relative poverty in the lower ranks, he said.