QUALIFIED ANALYSES
WHILE opinions differed on where Finance Minister Pravin Gordhan will find the additional R28 billion South Africa needs to address its budget deficit, pre-budget commentators generally agree that education and healthcare are certain to be key areas into which the vast majority of our country’s tax money will flow in years to come.
The 2016 #FeesMustFall protests again highlighted the crisis in which our country’s education system finds itself, with funding for free education high on everyone’s wish list. Then, the introduction of a National Health Insurance (NHI) scheme has been on the budgetary agendas for many years. Once implemented, the scheme is projected to require close to R400bn in funding, just for the first 10 years of its existence.
Clearly, Gordhan once again faced an unenviable task when he delivered his 2017 budget speech on Wednesday. However, there are some very bright young minds with plenty of good advice for the honourable minister. These talented and insightful students were given a chance to offer their inputs through the 2016 Nedbank Old Mutual Budget Speech Competition.
Entrants in the undergraduate category were tasked with exploring possible solutions to close the gap between required large education investments and still poor outcomes, while postgraduate students suggested appropriate funding models for the proposed NHI programme.
Fix inefficiencies
In her essay, Lorinda Marian, an undergraduate student at the University of Pretoria emphasises that the key to closing the education funding gap is not necessarily to find more money, but rather for the government to fix existing inefficiencies and address wasteful expenditure elsewhere.
Sphiwe Mphuthi, from the University of Pretoria, agrees with Marian that educational progress is ultimately the measure of a country’s economic development. But he contends that the government should prioritise education expenditure. He suggests that prioritising bursaries for deserving children at all education levels, proactively narrowing the funding gap between basic and higher education, and providing better financial incentives to teachers are the three pillars on which effective funding and outcomes could be achieved.
Nekaylan Naidoo, from the University of Cape Town, also highlights the need to improve the quality of educators, but points to a further need to mitigate the consequences of apartheid on current outcomes and address the lack of stability and certainty in curriculums. He therefore proposes a higher minimum wage within the education sector.
Outspoken
The majority of the competition entrants in the postgraduate category were equally outspoken about the need for government to unlock the healthcare funding by first addressing existing inefficiencies and budget wastage in other areas.
Mosima Ngwenya of North-West University agrees that the NHI is vital to address the socio-economic burdens associated with disease management. She contends that South Africa cannot afford not to implement the NHI. She proposes funding the scheme via a combination of income, VAT and sin taxes.
Rachel Theron, of Stellenbosch University, agrees that the NHI is necessary, but argues that the cost implications go far beyond the initial capital required. She cautions against using direct income tax as a source of funding. She proposes a tailored solution that combines direct and payroll taxes.
Osagyefo Mazwai from Rhodes University also contends the NHI funding source that would be the least detrimental to society is a payroll levy that is directly linked to an NHI Fund and operates in a similar fashion to the Unemployment Insurance Fund.