The NHI, in its current form, is not only irrational but risks destabilising the country’s tax base, says Discovery Group CEO Adrian Gore, who has warned against implementing the Bill in its current form.
While it supports universal healthcare, he added, South Africa simply cannot afford it.
Discovery used its presentation of the company’s interim results last week to outline its argument against implementing the NHI Bill as promulgated by the government.
The Bill is moving forward despite strong criticism from businesses, including Discovery, and civil society groups, who argue that it was pushed through Parliament without sufficient public input, Daily Investor reports.
Gore said the proposal doesn’t sufficiently tackle the core issue of funding being too little for it to be viable.
“The tragedy of our country is a narrow tax base with high levels of unemployment. You don’t have sufficient money to buy comprehensive benefits for all South Africans,” he said.
“It just doesn’t seem plausible. You could seriously destabilise the taxpayers who are actually funding the NHI.”
Discovery has urged the government to work with the private sector to make universal healthcare work, and detailed the tax increases that would be needed to fund the NHI – which would need about R200bn in additional funding each year:
• A 31% increase in personal income tax or
• A 6.5% increase in VAT or
• A 10 times increase in payroll tax
This is simply unsustainable for a country with an extremely small tax base, which is already being squeezed to raise revenue for the government.
“If you were to do that… you would destroy the economy,” Gore has previously said.
“It’s not a healthcare issue – it creates a real economic problem. I don’t think people would bear paying 30% more taxes and having 70% less healthcare.”
Gore said the only way to achieve a workable NHI was to keep the private sector in place.
Daily Investor article – 1,000% payroll tax increase needed to fund NHI (Open access)
See more from MedicalBrief archives:
‘No way to fund the NHI’ – Discovery CEO
Income tax hike and payroll tax proposed for NHI funding
Government dodges issue of NHI funding model – DA