When fig­ures talk loud­est

CityPress - - News - MSINDISI FENGU msi­disi.fengu@city­press.co.za

The fees com­mis­sion grilled Fi­nance Min­is­ter Pravin Gord­han on Fri­day over a pro­posed R120 bil­lion fund­ing short­fall needed to re­vamp the coun­try’s higher ed­u­ca­tion sys­tem. Judge Jonathan He­her’s com­mis­sion of in­quiry into higher ed­u­ca­tion and train­ing wanted to know what was stop­ping Trea­sury from ap­prov­ing the fund­ing to deal with higher ed­u­ca­tion’s state of cri­sis. Higher Ed­u­ca­tion Min­is­ter Blade Nz­i­mande had told the com­mis­sion in Oc­to­ber last year about the pro­posal, ar­gu­ing that he had sub­mit­ted var­i­ous bids to Trea­sury which were un­suc­cess­ful.

Gord­han in­di­cated that the econ­omy was not grow­ing fast enough and that Trea­sury would not be able to fund free ed­u­ca­tion un­less there was a shift in gov­ern­ment pri­or­i­ties.

“There will al­ways be ten­sions be­tween what is re­quired and what is avail­able. I think it’s good to look into the fu­ture and have the num­bers,” Gord­han re­torted. He added that the process of pri­ori­tis­ing fund­ing was a “col­lec­tive gov­ern­ment de­ci­sion” and not Trea­sury’s alone.

Gord­han and his deputy, Mce­bisi Jonas, pre­sented their case on be­half of Trea­sury at the com­mis­sion’s hear­ings at Tsh­wane Mu­nic­i­pal Coun­cil Cham­bers in Cen­tu­rion.

Among other ques­tions, the com­mis­sion­ers wanted to know whether Trea­sury would con­sider pay­ing for free ed­u­ca­tion by us­ing un­claimed gov­ern­ment pen­sion funds, which have been un­used for more than a decade. They fur­ther asked whether Gord­han still be­lieved that if cor­rup­tion could be erad­i­cated, money would be­come avail­able for free ed­u­ca­tion. They also asked Gord­han who, ac­cord­ing to him, made “bad de­ci­sions” in gov­ern­ment, par­tic­u­larly as re­gards fund­ing al­lo­ca­tions for the var­i­ous press­ing needs fac­ing the state.

The com­mis­sion’s ques­tions were based on Nz­i­mande’s prior pre­sen­ta­tion, in which he ex­plained that he had ap­pointed task teams who com­piled com­pre­hen­sive reports de­tail­ing the na­ture of fund­ing re­quired to over­haul ter­tiary ed­u­ca­tion. But funds then never be­came avail­able.

Gord­han said the rul­ing party in­di­cates pri­or­i­ties, and ed­u­ca­tion has been pri­ori­tised for fund­ing over the years, with its share of the pie pro­gres­sively grow­ing. How­ever, there were other gov­ern­ment de­mands that Trea­sury was also re­quired to con­sider thor­oughly.

Gord­han said Trea­sury was open to pro­pos­als on how to fund free higher ed­u­ca­tion, in­clud­ing the pro­posal of us­ing un­claimed gov­ern­ment pen­sion funds if there was good ev­i­dence to sup­port the pro­posal. How­ever, he warned against the risks for the pub­lic purse should le­git­i­mate ben­e­fi­cia­ries of un­claimed pen­sions sud­denly sur­face and de­mand their pay­ments. There would also be in­ter­est on pay­ing back the debt.

He cited an ex­am­ple, where the de­part­ment of min­eral re­sources had an­nounced plans to in­ves­ti­gate mines and to check whether they were prop­erly com­pen­sat­ing mine work­ers.

Trea­sury fur­ther stated that in 2011 there were about 1.3 mil­lion in­di­vid­u­als who com­pleted a de­gree, and about 80 000 in­di­vid­u­als who grad­u­ated in 2014.

Trea­sury es­ti­mated that if each new grad­u­ate faced a 1 per­cent­age point in­crease in their mar­ginal tax rate, the tax thus raised would be about R200 mil­lion in the first year.

If this in­crease ap­plied to all grad­u­ates, it could gen­er­ate only about R3 bil­lion an­nu­ally, while the 26 pub­lic uni­ver­si­ties col­lec­tively spent R59.8 bil­lion to op­er­ate in 2015.

Gord­han said repri­ori­tis­ing gov­ern­ment pro­grammes or us­ing funds that were un­spent and then re­verted to the Na­tional Rev­enue Fund, had con­se­quences. In­stead, the sur­plus still needed could be ac­quired by re­duc­ing gov­ern­ment debt or re­duc­ing the es­ti­mated R15 bil­lion weekly bor­row­ings.

He also ex­plained that at times a de­ci­sion to roll over funds was based on contractual agree­ments with re­spec­tive gov­ern­ment de­part­ments which failed to spend.

Gord­han re­it­er­ated that cor­rup­tion, lack of good lead­er­ship and good man­age­ment re­mained the chal­lenges. He cited the Au­di­tor-Gen­eral’s reports that pointed out lack of lead­er­ship in mu­nic­i­pal­i­ties and gov­ern­ment de­part­ments where due dili­gence was not ex­er­cised in spend­ing state funds.

“We’ve got to man­age what we have. Spend it bet­ter, use it bet­ter and get a bet­ter im­pact. The losers are the poor­est of the poor. The cor­rupt are rob­bing the poor to ei­ther ac­cess wa­ter or [get] a house,” he said.

Part of Trea­sury’s pre­sen­ta­tion in­cluded a pos­si­ble grad­u­ate tax, which has been pro­posed by sev­eral groups to be levied di­rectly from all grad­u­ates. One of the com­mis­sion­ers asked whether all stu­dents or only those funded by gov­ern­ment would be taxed.

Trea­sury’s re­sponse was that even wealthy stu­dents who were not di­rectly funded by gov­ern­ment through the Na­tional Stu­dent Fi­nan­cial Aid Scheme, ben­e­fited through sub­si­dies paid to uni­ver­si­ties. But he added that the is­sue should be fur­ther dis­cussed.

Trea­sury noted that such a tax was, how­ever, still un­likely to raise the rev­enues needed to fund free uni­ver­si­ties.

TALK TO US Should stu­dents be taxed ex­tra to re­cover free ter­tiary ed­u­ca­tion ex­penses, or do you think gov­ern­ment must shoul­der all the costs?

SMS us on 35697 us­ing the key­word FEES and tell us what you think. Please in­clude your name and prov­ince. SMSes cost R1.50

PHOTO: MSINDISI FENGU

THE CASE FOR AND AGAINST Fi­nance Min­is­ter Pravin Gord­han chats with his deputy, Mce­bisi Jonas, at the fees com­mis­sion pro­ceed­ings in Cen­tu­rion on Fri­day

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