1. Food Voucher Project June 2002 Promoted by: Womens Development Business Investment Holdings Disability Employment Concerns Trust Accor S.A.

2. Progress to date We have met ministers of the following government departments in the past year: Social Development Public Enterprises Labour Agriculture as well as senior officials of the departments of Finance & Health

3. Social Development Committee A multi-party delegation comprising members of this committee visited Brazil during the past year The general consensus was that the system could work in South Africa

4. Issues emerging Something must be done to alleviate poverty Lack of delivery infrastructure – banking sector not geared for poor people - an unacceptably high percentage of the budget is spent on delivery of social benefits Malnutrition is a serious problem among families and children

5. Solutions proposed Basic Income grant Extension of child and other social development grants Food vouchers

6. The Food Voucher Platform Government can use the platform created by a food voucher program to deliver social aid to the poorest sections of the community The department of Social Development has a countrywide network which can identify areas of greatest need A food voucher delivery platform offers government a cost effective and efficient delivery mechanism

7. Why Food Vouchers? 1. Technology Only proposal which will create competing nationwide delivery infrastructures Infrastructures created by private sector at no cost to government Voucher companies will collaborate with government in setting technology standards Competing infrastructures created by voucher companies will enable government to deliver social payments by competitive tender

8. Why Food Vouchers? 2. Cost Effective Assume: R250 of food vouchers given to 1 million people every month Additional food consumption: R2,5 bn Tax cost to government: R750 million p.a. Cost to government net of additional revenue generated: R370 million

9. Why Food Vouchers? 3. Supported by all sectors The president of the Brazilian trade union federation describes food vouchers as the most successful social program in Brazil’s history French government calculates 37 000 jobs in France depend on the voucher program We have received written support for the concept from unions in countries as diverse as Britain and Rumania

10. Why Food Vouchers? 4. Informal Social Security Network The average household in South Africa has 5 members The average household has one wage earner 40% of South Africans live in households of 7 people or more The larger the family, the greater the nutritional deficiency (next slide) Food vouchers directly address this problem

11. Household Size Recommended monthly food Expenditure Actual average monthly food expenditure Food Expenditure Gap 1286.50424.55-138.05 2573.00762.53-189.53 3859.50818.1641.34 41146.00892.14253.86 51432.50879.62552.88 61719.00803.57915.43 72005.50810.911194.59

12. Why Food Vouchers? 5. Complementary to other initiatives The food voucher infrastructure can be used as a delivery platform to service and extend existing programs such as child support grants In the long term vouchers can be used as part of a comprehensive social security system as envisaged by the Basic Income Grant

13. The Brazilian Experience 10 million workers, particularly the low paid benefit No other social program has the social reach of the Worker Feeding scheme The food voucher infrastructure is used at municipal government level for poverty relief, particularly among the unemployed

14. Infrastructure government could use Accor, in co-operation with South African partners (banks, supermarkets, terminal providers) will roll out a countrywide network of card readers to implement the food voucher program The infrastructure will be a mixture of existing card readers and new machines ensuring comprehensive nationwide coverage The infrastructure of low cost card technology (already used in other countries) can be developed quickly in South Africa The network can be used to dispense a range of benefits including food, medicine, electricity, transport as well as payments in cash

15. A platform for other social payments Food vouchers initially target family feeding via employed workers The platform can be used to distribute food and cash benefits to others including the unemployed In both Brazil and France, local governments use food vouchers in this way Vouchers are complementary to government’s aim of assisting the poorest sectors of society

16. Conclusion Food vouchers address a fundamental problem of inadequate family nutrition Implementation of a food voucher program is cost effective for government and is a proven social benefit in over 30 countries The program will create an infrastructure which can be used for other social payments whether in cash or kind