CAPE TOWN – The newly released National Health Insurance (NHI) Bill has confirmed that taxes will indeed need to increase in order to fund the new scheme, through which the government seeks to fulfil its constitutional obligation to provide quality universal health care for all South Africans.
The Free Market Foundation (FMF) said in a statement on Friday that during these dire economic times, the NHI tax would be the final nail in the coffin for cash-strapped consumers struggling to make ends meet.
“Since the funding for the centrally controlled and administered NHI Fund will … come from a surcharge on taxable income and a payroll tax, the NHI is nothing but a tax on labour. A payroll tax will always, ultimately, be borne by workers, either through reduced earnings or compensation or job losses – precisely the opposite of what the poor in South Africa needs,” the FMF said.
In its White paper, Health Department Deputy Director-General Anban Pillay said the National Treasury estimated that to implement the NHI would cost taxpayers R256 billion. Pillay said the Treasury planned to release a revised paper with a revised costing of the NHI.
The foundation said, while it was supposed to help people access medical care, the NHI scheme would undermine any chance of economic success by either cutting wages or eliminating jobs altogether and would “entrench South Africa’s terminal economic conditions”.
The SA Medical Technology Industry Association (Samed), however, welcomed the release of the NHI Bill and expressed commitment to continued engagement in the process of NHI policy development and implementation and collaboration with the Department of Health and other relevant parties.
Samed represents 223 medical technology companies, whose products and devices play a vital role across the continuum of patient care – prevention, screening, diagnosis, treatment and rehabilitation.
“SAMED recognises the inequities of the current fragmented healthcare system. We view the proposed NHI as a crucial element that can assist South Africa in advancing universality and social solidarity as the pillars of a people-centred health system that does not discriminate along economic lines,” said Dr Terence Moodley, the chairperson of Samed’s NHI Committee.
The chairperson of the Portfolio Committee on Health, Dr Sibongiseni Dhlomo, also welcomed the Bill, saying under the NHI the government would provide a package of comprehensive health services for free at private and public health facilities, as part of its bid to provide more equitable access to quality healthcare.
Dhlomo said the Bill had not yet been referred to the committee, although it was tabled in Parliament.
“We need to wait for the parliamentary processes to take place before anything can be done. We are extremely happy about this move. This is one of the equalisers of society, where those who are poor can get access to good healthcare. We cannot wait to deliberate on the NHI Bill and have it before the committee so that those who are down-trodden can comment,” said Dhlomo.
Health Minister Zweli Mkhize called for robust debate on the newly released Bill. “As a department, we look forward to the robust debate that will surely come – as far as we are concerned all the hard questions only deepen our knowledge and understanding of the nation we intend to serve and sharpen our acumen for the policies we intend to implement,” said the Minister.
Chairperson of the SA Medical Association Angelique Coetzee said countries such as the UK and Japan started implementing their equivalent of the NHI under very difficult financial circumstances and South Africa would be no exception. “The question is not whether NHI will provide better healthcare but how the money will be better utilized to provide better healthcare for South African citizens to enjoy quality healthcare each of us has an obligation to ensure that we are part of this process.”
The FMF said South Africa had a very narrow tax base and it would be extremely unwise for the government to consider imposing another tax on already overburdened taxpayers to fund the NHI rather than trying to get more people actively involved in the workforce and adopting policies that will significantly increase the country’s economic growth rate.