What Gordhan could say about ‘free’ education in his budget speech
Finance minister Pravin Gordhan will be under pressure to put the matter of free tertiary education near the top of his agenda when he presents the Medium Term Budget Policy Statement (MTBPS) to Parliament on 26 October 2016.
Student protests have engulfed the country over the past several weeks, with students calling for higher education to be free under the #FeesMustFall movement.
In September, higher education minister Blade Nzimande announced that university councils are empowered to adjust their own fee hikes for 2017, but poor students will be covered by government.
SA universities are already under extreme financial pressures, due largely to the 0% increase implemented in 2016, something which president Jacob Zuma has already called for again in 2017.
Nzimande said that NSFAS students are already covered, with government absorbing any 2017 hikes. The ‘missing middle’ students, for now, are not as lucky.
Students with family income of up to R600,000 per annum will be supported by government, he said, while above that amount, each university council will essentially determine the increase.
Treasury meanwhile, warned that the fiscus could not carry the burden of a 0% increase, while Nzimande said that universities needed an increase of at least 6% in 2017 in order to avoid “collapse”.
Students however, insist on free education, with their protests becoming increasingly violent and causing hundreds of millions of rands in damage to property.
In a note sent to his investors on Wednesday, Nomura analyst, Peter Attard Montalto, said that while it is unclear as yet what National Treasury will want to announce, “there will likely be a discussion of various funding modalities such as a graduate tax and greater support for the student funding body”.
However, because the Fees Commission has not yet ruled – only likely in 2017 – it will be difficult for the National Treasury to be too specific, Nomura cautioned.
“The NT has already submitted to the Fees Commission that it will require an additional R90.5 billion over the coming three fiscal years to make higher education fee free. This cannot simply be placed into the MTBPS at this time.
“Instead, we think some allocation will be made for the already announced partial fees freeze for 2017/18 by the government which may be of the order of R2-3 billion and compares with R5.5 billion already allocated in additional funding as a result of the fee freeze roll over cost from the current fiscal year,” Attard Montalto said.
He added that subsidies for the coming fiscal year will have to be rolled forwards too requiring greater use of contingency reserves in the future.
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