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FROM THE DIRECTORS DESK
Dear PACSA colleagues and friends
We present to you the first PACSA newsletter of 2016. Much has happened in the first few months of this year: the drought that SA has experienced and other factors such as the drop in the value of the Rand has meant that food price inflation has increased by more than 14% since November last year. The implication of substantial food price inflation in 2016 as well as above inflation increases in electricity tariffs are set to exacerbate the already severe affordability crisis facing households, already under enormous financial strain.
PACSA has called for a national conversation to imagine a new economic model of dealing with our socio-economic challenges because we are moving from crisis to crisis and with each crisis the impact is more severe. See the February 2016 PACSA food Price Barometer and our response to the 2016 national budget below.
As we begin 2016 various local and national struggles continue to dominate our public space. These include struggles such as the anti-racism; the university student’s struggles which continue the #Fees Must Fall movement; workers struggles and local struggles around voice and democratic practice.
Our featured article: “The rainbow is dead- beware the fire, SA” provides a good analysis of where South Africa finds itself politically and draws our attention to the pressing need to work within a framework that advances an emancipatory politics. This is particularly critical as we work towards social justice for all and will guide our reflections on our own practice in 2016.
We hope you find the articles and stories thought-provoking and of interest to you.
Seven Dutch activists, connected to the Hague-based foundation “Mensen Met Een Missie”, visited us at PACSA earlier this year. As part of their visit we hosted a conversation, attended by 28 people, on the ‘European refugee crisis.’ Professor Georg Frerks, professor of Conflict Studies at Utrecht University, who gave the introductory remarks, noted that the hundreds of thousands of refugees entering Europe are only a fraction of the number of people displaced by war and conflict in the world. After the Second World War, Europe had to deal with much larger numbers of displaced people and it is in fact possible to provide refuge to all those seeking it in Europe.
On the 19th February 2016 PACSA, supported by Oxfam Australia, facilitated a monitoring exchange conversation between four different organisations actively involved in monitoring public health clinics. The organisations included: The AIDS Legal Network (Cape Town), Project Empower (Durban), The National Health Insurance Research Team (Pietermaritzburg), and Hilton Valley Health and Development Organisation (Howick).
Minister Gordhan’s budget seeks to build stronger foundations for our future society and economy. Human capital is core to building a stronger foundation. At the most basic level, greater public investment is needed so that households can access sufficient and nutritious food.
On the 24th February Minister Gordhan announced that the state pension would be increased by R80 in April and a further R10 staggered till October, moving the total pension from R1 420 to R1 510. Child Support Grants would be increased by R20 in April, moving the total allocation granted from R330 to R350.
Comparing the increases in social grant allocations for 2016 to the inflation on a basket of food which low-income households try to buy every month, we see that the price of the PACSA food basket increased by 4.6% (R82.20) month-on-month from R1797.04 in January 2016 to R1.879.24 in February 2016. Our data shows that even before the social grant increases have come into effect; they have already been eroded by food price inflation. Read the PACSA Food Price Barometer here.
The price of food in the baskets of low-income households shot up by nine percent in the three months to January — and there are more price hikes to come. “Extreme levels of food price inflation call on government to intervene immediately and decisively where they are able to,” the Pietermaritzburg Agency for Community Social Action (Pacsa) said in its survey of monthly food inflation for low-income households that was released yesterday.
The month-on-month increases in the December and January food price data were eight times higher than the average monthly increases over the preceding 12-month period, Pacsa said. Read the full article here published by News24 on 2 February 2016.
Julie Smith from the Pietermaritzburg Social Agency for Community Social Action has been speaking to Newswatch ahead of their release of this month's Food Price Barometer Report. The report tracks the prices of more than 30 basic food items across a number of retail stores servicing particularly the lower-middle income market. Smith says the figure is at least eight times higher than last year's average food increase of 0.5% to 2% month-to-month. She predicts the situation is likely to get worse as the drought continues to impact local food production. Read the full article here published in East Coast Radio on 28 January 2016.
In the past, thanks to the quirky Prescription Act, it wasn’t illegal for a collector to try to get someone to pay a prescribed debt, which is a debt which has been dormant for more than three years – no payment or acknowledgement by the debtor in that time, and no summons issued (with the exception of home loan and state-related debts which only prescribe after 30 years)....[Moreover] According to food price monitor the Pietermaritzburg Agency for Community Social Action, for every R100 in a middle income household, 77% goes towards servicing debt, leaving very little for food, education and transport. How much of that money is servicing very old, inflated debt when it could be educating or feeding a child, I wonder? Read the full article here published in Dispatch Live on 22 February 2016.
What the national minimum wage should be? If too low, it will be meaningless. If too high, the economy will perish
A national minimum wage (NMW) in South Africa is inevitable. But the level at which it is set will be the difference between addressing poverty and inequality meaningfully and plunging the economy into decline. After a general consensus that a NMW would benefit South Africa, the second day of the NMW symposium held at the University of the Witwatersrand (Wits) last week covered the level it should be set at and suggested practical guidelines for its implementation...
The Pietermaritzburg Agency for Community Social Action (Pacsa), for example, uses a price barometer which is revised monthly and includes a static basic basket of goods. When energy and medical expenses are included, poor people would still have to turn to debt, as many already do. Read the full article here published in Money Web on 8 Feb 2016.
The Budget - aimed at cushioning the poor and middle class from economic hardship - featured a halt on tax hikes, a freeze on thousands of non-critical public service jobs, plans for the trillion-rand nuclear deal put on ice, financially crippled state entities placed in the crosshairs and a R16.3-billion funding boost for higher education to help students...[However] Social-grant increases will barely register a blip in bank accounts and planned fuel levy increases are expected to send food prices skyrocketing.
Mervyn Abrahams, director of the social advocacy group Pietermaritzburg Agency for Community Social Action, said the Budget did little to help the poor. "The fuel levy will not only make transport more expensive, it will have a knock-on effect on food prices. The grant increases don't keep up with the recent rapid rise in food prices. Between November and January there was a 9% increase in food prices." Read the full article here published in the Times Live on 25 February 2016.
Middle to low-income households, already struggling to make ends meet each month, will be pushed deeper into debt by the latest electricity hike. That is according to Mervyn Abrahams, of the Pietermaritzburg Agency for Community Social Action (Pacsa), who said he expected more households to have their power cut or forced off the grid.
“This cycle has to stop and Eskom needs to find a different business model that would allow them to generate sufficient electricity at affordable prices for households and business, without pushing hundreds of thousands of households deeper into debt, poverty and darkness,” he said. Read the full article here published in the Daily News on 3 March 2016.
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