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Conditions needed in a society to enable it to advance towards a welfare state

The Inclusive Society Institute hosted its second social democracy dialogue on Tuesday, 22 March 2022.

The first dialogue focused on the meaning of social democracy in the modern world. It concluded that social democracy is not a cast in stone. It changes over time. While there are underlying values that remain, such as freedom, equality and solidarity, there are different ways and interpretations that depend on context and grouping. What has changed over time is the interpretation of these values and how to pursue them.

Panelists also agreed that much more discussion is needed. They identified five themes around which a series of workshops will be developed to deep-dive the issues that were identified, which are that:

  • Social democracy requires a strategic definition;

  • Social democracy is about people;

  • It requires an internationalist approach

  • It must advance a credible alternative to neo-liberalism, and

  • a persuasive narrative needs to be developed.

In this second dialogue panelists responded to the question: What are the conditions that need exist in a country in order for it to advance towards the welfare state.

The objective of the dialogue was:

  • To share the experience of the panelists' countries’ own pathway towards the implementation of their sustainable welfare programmes.

  • To get an understanding of the participant countries’ economic, employment and fiscal structure. For example, the introduction of welfare programmes to benefit the vulnerable in society may be quite feasible in a country with single digit unemployment, high numbers of taxpayers, high taxation rates, and developed economies. In South Africa unemployment stands at 46%, the upper margin personal tax rate already stands at 45%, and around 1.58 million people out of a population of nearly 60 million are shouldering the bulk of the income tax paid. And it is estimated that just 25% of those that pay income tax pay 80% of all the income tax that is collected.

  • Therefore, panellists needed to consider what socio-economic and socio-political conditions are needed in a country to underpin the funding and sustainability of a welfare state.

This is an important discussion within the South African context.

Public policymakers in South Africa have recently introduced a suite of legislation that supports the advancement of the country towards what can be termed a welfare state. This includes legislative proposals aimed at introducing a National Health Insurance, Basic Income Grant, and National Social Security Fund. This comes on top of already approved and implemented social interventions such as free housing, free schooling and tertiary education for the poor, free water and electricity, school feeding schemes, and child and other welfare grants. What is of concern to many in the policy development fraternity is the impact that it will have on the fiscus, that is the long-term sustainability of the interventions.

This discussion will hopefully help shape policy in this regard.

Panellists participating in the discussion were:

  • Lord Peter Hain, A former UK Labour Party Cabinet Minister and activist

  • Hon Maria do Rosario MP, Workers’ Party, Member of the Chamber of Deputies of Brazil

  • Dr David Masondo MP, South African Deputy Minister of Finance and Principal of the Oliver Tambo School of Leadership, South Africa

  • Mr Johan Hassel, International Secretary of the Swedish Social Democratic Party

  • Dr Michael Dauderstädt, who has previously held posts at the Friedrich Ebert Stiftung as head of the International Policy Analysis Unit, and director of the Division for Economic and Social Policy.

  • Prof Chris Mullard, Author, former Professor of Education and Ethnic Studies at the University of Amsterdam, and Visiting Professor at the University of London and at the Royal Agricultural College. Co-founder of Focus Consultancy, UK.

  • Mr Franz Knieps, Member of the Board, BKK Dachverband, Germany.

  • Mr Mariano Schuster, Editor, Nueva Sociadad, Buenos Aires, Argentina

  • Dr Martyn Davies, Managing Director, Emerging Markets and Africa, Dean, Deloitte Alchemy School of Leadership, Chief Economist

The dialogue was moderated by Roelf Meyer, a former South African Minister, ISI Advisory Council member and Director of In Transformation.

Sebastian Sperling, Country Representative of the Friedrich Ebert Stiftung in South Africa consolidated and closed the discussion.

In closing the dialogue, ISI CEO, Daryl Swanepoel said:

“Globally, social democrats need to define their message in a way that establishes clear blue water between themselves and those to the right. More than ever the world cries out for social justice, and greater equality. And the Russia Ukraine conflict also proves that an internationalist approach is crucially important, also now needed more than ever. An approach based on a value system that places the wellbeing of our citizens at the centre. But equally important is the need to develop the economy, because only if the economy is successful and growing will be able to fund programmes that are needed to deliver a truly just and equitable society. How to balance these two, is what is needed to be discussed”.


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