Kiss your R4,000 a year ‘state subsidy’ goodbye: ANC

 ·18 Apr 2024

Deputy Minister of Cooperative Governance and Traditional Affairs and ANC National Executive Committee (NEC) member Parks Tau says the government is subsidising the private healthcare sector in South Africa—and this needs to end.

Speaking at a national election debate hosted by the Mail & Guardian and the University of Fort Hare this week, Tau, representing the ANC, tried to convince attendees that the NHI would see to it that South Africa gets access to free quality healthcare.

“National Health Insurance is about universal access to health and life – your ability to live should not be determined by your economic status,” he said.

“What people are not saying is that we have two systems of health in the country. We have a public system that is under strain from investment, and we have a private system that essentially benefits those who can afford it.”

Tau added that the private sector is being subsidised by the state, and those resisting the NHI want to benefit from this state sponsorship while still being able to access private healthcare.

“They are not admitting that private health insurance gets a rebate on taxes – so the state is subsidising access to the private health system. Why should it only be left to those who can access those system?” he said.

Tau was referring to medical aid tax credits, which medical aid users in the country can claim back each year.

Medical aid users can claim back R364 per month for the first two members of a policy and a further R246 per month for every other member or dependent on the same policy.

A South African household of four could claim back up to R14,640 per year, while an individual can claim up to R4,368 per year in tax credits in 2024.

The NHI Bill specifically provides for the government to end these tax credits and direct the proceeds into the NHI Fund.

“We understand that there will be resistance because some will want to protect (this). But we are about the majority of this country,” Tau said.

The ANC’s mess

DA chief whip Siviwe Gwarube, representing her party in the debate, hit back at Tau’s characterisation of the situation, however.

While she conceded that there is indeed a two-healthcare system in South Africa, she said the ANC government is to blame.

She said Tau was “spewing myths” and that poor South Africans have been subjected to a poor public healthcare system for decades at the hands of the ANC government, which has allowed it to fall to maladministration and corruption.

She said that after letting the public healthcare system fail, the ANC government wants to create yet another state-owned enterprise—the NHI—and expects the country to trust that it won’t end up the same way.

The health department has previously attempted to address corruption concerns around the scheme, with the department’s deputy director-general for NHI, Nicholas Crisp, saying in December 2023 that it was too soon to call it corrupt.

“To criticise an agency that has not yet been established, let alone operationalised, is definitely premature,” he said, promising that the NHI Fund would be run transparently and efficiently.

Other political parties at the debate also hit back at the NHI.

The IFP said that the scheme would remove choice, taking away the rights of citizens to choose where to be treated -and Action SA said that different processes should be used to get the public and private sectors to work together, getting the backing from healthcare providers.

Long time coming

The NHI Bill has faced an uphill battle to make its way to the desk of president Cyril Ramaphosa, where it now waits to be signed into law.

The National Department of Health again confirmed this week that the government will be looking to dip into taxes to get the NHI Fund going. Conservative estimates put the required funding at R200 billion a year.

The bill has been widely rejected by opposition parties, the private healthcare industry, business organisations, civil action organisations and legal experts.

The Public Service Association—a union representing some 235,000 public sector workers—was the latest in a long list of groups to call for the bill to be delayed and reviewed, citing unsustainable funding mechanisms.

The government has been criticised for ignoring feedback on the bill and for pushing it through parliamentary processes using an ANC majority. Opposition parties have characterised this an election ploy ahead of the 29 May vote.

Various groups plan to take legal action against the bill as soon as it becomes law on constitutional grounds.

Read: Major public service union urges Ramaphosa to delay the NHI

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