NHI will potentially raise taxes by an average of 25%, say experts

Despite promises that the National Treasury will determine the sources of funding for the National Health Insurance (NHI), there is no doubt that taxpayers will foot the bill for the scheme, potentially raising taxes by an average of 25%, according to experts.

Based on the recently circulated fact sheet on the NHI Bill, the projected costs will likely include a payroll tax and an income tax surcharge in an already crippling economy.

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Chief economist at Econometrix Dr Azar Jammine said there was no way taxpayers were going to accept this, especially “when they are the main contributors to the amount of money that the government is receiving with which to fund the already failed service delivery”.

Jammine said the major pushback was coming from people saying government should prioritise improving the public healthcare system first, before trying to attack what was already working straightaway.

He noted the public mistrust of the government, “and the doubt that national government is capable of running the system is one of the other big reservations”.

“We saw it with Covid and there are people refusing to give it a chance where we would see a repeat of Covid … funds that are earmarked, collected from taxpayers, will be siphoned off into politicians’ pockets.”

Responding to questions following the release of the fact sheet, Treasury said no new work had been done to determine costs and said it had provided inputs to the department of health and the Cabinet throughout the process.

“Most legislative drafts themselves do not deal with financial matters. Legislation that deals with financial matters must be tabled by the minister of finance. These are developed through the budget process,” it said.

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According to News24, Treasury also noted the proposal for a payroll tax levied on both employers and employees would raise the cost of employment for employers and mean lower take-home pay for workers.

“Currently, unemployment insurance contributions and skills development levies are levied on all formally employed workers, including workers with incomes below the personal income tax threshold,” Treasury said.

Why NHI won’t work

There is no doubt that quality healthcare is important and a right according to South Africa’s constitution. However, deep public mistrust in government has made the National Health Insurance (NHI) another candidate of large-scale corruption.

Political analyst Arthur Shopola said the idea behind the NHI was amazing, seeking to bridge the gap for those who had been sidelined for too long when it came to matters health and other inequities.

“What I find staggering is the same people who want bridge that gap are the ones who perpetually decline the same poor people of their healthcare needs through corruption,” Shopola said.

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“Government will never be able to implement or even keep up with this NHI Bill, not with their track record.”

Paramedic Shane Greyling said the state couldn’t regulate its state institutions so “how will it manage the nationalisation of healthcare?”

State emergency services were in a bad state – “some of those ambulances don’t even have oxygen or the basics”, he said.

England looking to recruit

The National Health Service (NHS) in England has confirmed more recruits are on the cards, with plans to train more doctors, nurses, dentists and other healthcare staff as part of the first long-term workforce plan.

Following warnings that many local healthcare workers were planning to jump ship, the NHS did not confirm or deny SA was one of the countries they were looking to recruit from.

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According to the health service ahead of its 75th anniversary, “the NHS long-term workforce plan sets out how the NHS will address existing vacancies and meet the challenges of a growing and ageing population by recruiting and retaining hundreds of thousands more staff over 15 years and working in new ways”.

“The NHS plan, a once-in-a-generation opportunity to put staffing on a sustainable footing and improve patient care, focusses on retaining existing talent and making the best use of new technology alongside the biggest recruitment drive in health service history to address the gap,” it said.

“It was commissioned and accepted by the government, which has backed the plan with over £2.4 billion (about R56 billion) to fund additional education and training places over five years on top of existing funding commitments.”

Political commentator Simphiwe Shongwe said the NHS was in desperate need of healthcare workers, “and South Africans are ready and willing to leave”.

“According to reports, the British Medical Association has warned the NHS is at risk of falling apart, and they are talking about access to healthcare getting worse because of staff shortages,” she said.

“And with the kind of support they are getting from government nothing will stop them from making sure those who are willing can easily get work permits and visas.”

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Shongwe said this was a threat to SA, “especially because of the deep-rooted lack of confidence in the capacity of government and its financial ability to ensure the success of the National Health Insurance service”.

For the past three years the SA Medical Association has warned that thousands of doctors will leave the country ahead of the introduction of the NHI.

NHI: Decisions, decisions…

With the government forcing through the National Health Insurance Bill, The Citizen spoke to healthcare workers about their options: stay and try and make it work or search for greener pastures?

Jano Lingenfelder was studying to become a nurse but now wants to finish his training abroad.

“I am currently doing a homecare course and want to do a nursing course after that. I have decided to go overseas and complete my nursing qualification there because the quality of education and standards there are much higher than here in South Africa,” he said.

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Lingenfelder said he would have to do a bridging course because SA was not on the same standard as England, where he planned on moving.

“The NHI influenced my decision,” he said.

Elize van Niekerk said the NHI wouldn’t affect her because she planned on doing private work once she was qualified. “I want to work as a caregiver for the elderly,” she said.

The NHI might assist current caregivers in stateowned nursing homes, who do not get paid as well as the caregivers who work privately through agencies. Van Niekerk said they were not worried about the NHI because nothing works in South Africa.

“So why will this work and how will they pull it off?”

Van Niekerk said if it wasn’t for her family in South Africa, she would consider moving overseas.

General practitioner Leon Odendaal said he wasn’t going anywhere, although he wasn’t sure how it would work with the NHI.

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“It might mean you will have to see more people for less money and I don’t know if that will work,” he said.

He said the level of care would not stay the same, especially if doctors were strained, “but on the other hand, it may open up the sector”.

–Written by Reitumetse Makwea and Marizka Coetzer