Cape Town - The government should be more blunt about the country’s economic growth prospects to send the message that the state is in crisis, and that sacrifices will have to be made, academics from the Human Sciences Research Council (HSRC) have said.
Coming out on Friday in support of a wealth tax to help fund the expansion of access to university education, HSRC chief executive officer Professor Crain Soudien said that while South Africa had achieved “extraordinary” growth of 500 000 in the number of graduates over the past five years, this needed to increase by the same number every year up to 2030 to meet the targets of the National Development Plan.
This explanation, that the problem was far bigger than simply paying for those needy students not already receiving support, came as members of Parliament grappled with the question of how to raise funds to meet the demands of the #FeesMustFall movement for free education.
Briefing Parliament’s standing committee on public accounts on the medium-term budget policy statement tabled by Finance Minister Nhlanhla Nene last week, Soudien said the concern was from where the money would come.
Higher Education Minister Blade Nzimande said earlier in the week that covering the full costs of all qualifying university students would require an estimated R37 billion (in 2011 prices) over the next three years.
Funding from the National Student Financial Aid Scheme covered 16 percent of university students, but it was estimated that 25.5 percent of students met the requirements for assistance. Closing this gap was the ideal scenario explored in a report on free university education he had commissioned, Nzimande said.
Soudien said there appeared to be a consensus that some form of wealth tax was needed.
It was clear the wealthy had prospered more in the past 15 years than the poor.
His colleague, Dr Greg Houston, said the finance minister should make “realistic announcements of growth figures so the message is sent out that the state is in crisis and it requires sacrifices from society as a whole, and dampens expectations that are unrealistic”.
Professor Sharlene Swartz said perceptions of high levels of corruption would make it hard to implement a wealth tax. “My own research recently has shown that as soon as you start speaking about a wealth tax or increasing taxation, people start saying if only government could eradicate the R35bn in corrupt spending.”
Even though this figure had never been substantiated and might well be lower, it left the government with a “huge perception problem that we need to fix before people are going to want to dig into their pockets”.
Responding to concerns raised by the HSRC about the performance of the state, ANC MP Sheila Shope-Sithole said Parliament needed to shoulder much of the blame. “Because, for a very long time, I’ve listened to members of Parliament distancing themselves from the problem we have – blaming government, and this one and that one.”
The constitution gave Parliament the responsibility for oversight.
Political Bureau
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