The ruling party could hijack the #feesmustfall protests, shift blame back onto the universities and accept the protesters’ demands, an emerging markets economist believes.
“Government will have to accede to either no fee hikes for next year, or allow fee hikes but insist on greater levels of income differentiation so richer students pay a lot more and poorer students pay unchanged or lower fees,” said Nomura economist Peter Attard Montalto. “The government can push this issue down onto the universities.
“Our very rough baseline then is that this will go on for a few more weeks before the ANC (African National Congress) fully hijacks the protests, shifts blame back onto the universities, accepts the protesters’ demands and things start to quieten down as exam season starts and then the universities break for the Christmas summer holidays.”
ANC Secretary General Gwede Mantashe has said the ANC fully supports the frozen fees for next year, said Montalto. “This is a classic ANC political tactic of attempting to hijack a popular movement not started by the ANC, even though its own policies have led to a given outcome,” he said.
Mantashe has also stated this is a good opportunity for the government to take more responsibility for higher education oversight and regulation away from universities, explained Montalto.
“The universities will then be left to balance their books through cuts to capital and infrastructure projects,” he said. “But as these are already budgets that are run to the bone, cuts to support staff and research, reduced teaching time would likely also have to be on the table.”
This response would provide no money for transformation, student support, improving quality, expanding the number of black academics and researchers or taking greater numbers of students, he said.
“The deeper underlying issues brewing within the student body would therefore not be addressed,” said Montalto. “As such, the long-run risks to watch in this area remain.”
Treasury finds itself in a difficult spot here, with the fiscal space so tight, said Montalto.
A much larger proportion of Department of Higher Education and Training budget could go to universities, but it is also responsible for trying to increase much needed vocational training and apprenticeships, which arguably are needed by a large segment of the population, the unemployed and potentially future unemployed youth, the economist explained.
“This is, however, a classic example of where current expenditure (including wages) within the public (government) sector needs to be constrained with greater urgency in order to make room for important expenditure on education that would solve future employment and growth issues and boost potential growth,” he said.
As an example, transfers to universities are set to be R83.5bn over the current and coming two fiscal years, which compares with R63.9bn additional expenditure needed for the increased public sector wage bill in yesterday’s mini budget.
“Treasury could have dug deep with savings (as it has) in order to increase the transfers to universities by 50% instead of having to do it to fund public sector wage growth well above inflation and productivity increases and spend the rest on maintaining consolidation,” said Montalto.