Big NHI tax fears allayed – for now

Those “packing for Perth” over the imminent implementation of the ANC’s utopian National Health Insurance (NHI) may be able to relax… for a while. That’s one of the takeaways from yesterday’s national budget from Finance Minister Enoch Godongwana. Members of medical aids didn’t have their tax credits whipped away from under them – although they were devalued because they were not increased in line with inflation.

Nor were there any horrific taxes or levies proposed to fund the scheme, as many had feared. Those may still come, though.

Then there was the announcement that the NHI will be allocated just R1.4 billion – compared to the overall health budget of R272 billion. That R1.4 billion will be used in “system-strengthening activities”, including implementing a digital national health information system; upgrading health facilities and improving quality of care; improving management “in preparation for contracting” and “developing reference prices and provider payment methods for hospitals”.

The ANC may not be kicking the can down the road so much as acknowledging that the NHI is going to be the biggest financial and social mountain climbed by any government in this country’s history. Yet, after President Cyril Ramaphosa’s punting of the NHI in his State of the Nation Address last week, his supporters – and potential voters – will be mollified that transformation is still on track.

The budget could have been a lot tougher. Taxpayers will be worse off because there was no adjustment to tax brackets, but a standstill in the fuel levy was a nice surprise. Perhaps the best news, though, was that the government is trying to balance development and fiscal prudence and hoping to reduce our debt and its repayments, as well as return to an operational budget surplus soon.