The latest iteration of the national health insurance (NHI) policy paper induces a depressing sense of déjà vu. We are given no better an understanding of material details such as how much the scheme will cost and where the money to pay for it will come from. Despite alarm bells ringing throughout the economy, the government is going ahead with the scheme in an increasingly authoritarian attempt to limit our civil liberties and freedoms.
The proposed mandatory payments into the central NHI Fund will crowd out private insurance. Cash-strapped individuals will no longer be able to afford to pay voluntary private insurance premiums when burdened with a mandatory NHI payment as well. Those unable to pay both will be forced to resort to using our already overstretched public health service.
South African labour should be fuming since NHI necessitates an increase in the taxes levied on an already overtaxed population. The proposed payroll tax is a tax on labour. Workers will bear the cost, either through lower pay or job losses. This will leave us with less money for savings and investment, and thus NHI will usher in even slower economic growth.
The Department of Health is trying to make us believe that a medical tax credit is the same as a subsidy. A tax credit in respect of medical expenses is a government decision to refrain from taking money in the form of tax from taxpayers who are paying their own medical expenses and generally not using public healthcare. A tax credit is not a subsidy.
Given the country’s bleak economic growth forecast, narrow tax base and a ballooning budget deficit, SA simply cannot afford a system of nationalised healthcare.
Jasson UrbachVia e-mail This article was first published in Business Day on 4 July 2018