No NHI tax expected in medium term

2013-02-27 15:26 - Sapa
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Minister of Finance Pravin Gordhan. ~ SAPA

Cape Town - It is unlikely that tax will be increased in the medium term to fund the National Health Insurance (NHI) scheme, Finance Minister Pravin Gordhan said on Wednesday.

"The initial phase of NHI development will not place new revenue demands on the fiscus," he said.

Tabling his 2013 Budget in the National Assembly, he told MPs: "Over the longer term, however, it is anticipated that a tax increase will be needed."

According to the 2013 Budget Review, National Treasury will work with the health department to determine the required funding for NHI.

A discussion paper inviting public comment on various options would be published later this year.

"The paper will also examine arrangements for risk and revenue pooling, mechanisms for the purchasing of health services -- including the size and cost of the proposed health benefits package, and the mix of public and private provision of health care."

The NHI aims to ensure citizens are provided with essential health care, regardless of their employment status and ability to make a direct monetary contribution.

Last year, Health Minister Aaron Motsoaledi launched 10 pilot projects to assess various policy options for NHI.

The projects were set up in all provinces and covered 10 million people.

Conditional grant funding to the tune of R1.3bn is helping to finance the projects.

The 2013 Budget provides for a new national health grant with two components, one for NHI and one for health facility revitalisation.

The health department is to play a closer role in delivering these services alongside the provinces.

"This measure has been introduced to deal with underspending and weaknesses in the performance on these grants."

The new grant includes allocations of R291m for 2013/14, R420m for 2014/15 and R443.8m for 2015/16.

The national health department will spend R370.6m in the new financial year on the NHI and health financing sub-programme.

In 2012/2013, R182.1m was spent on the sub programme.

By 2016, estimated spending on the NHI and related funding is expected to be about R546m.

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