Cape Town - The ANC is seemingly intending to increase taxation significantly to fund the proposed national health insurance system (NHI).
According to analysts, it could cost the ordinary taxpayer up to 15% in additional tax to meet the ambitious aims of the plan.
This week a document by the ANC's task team investigating the NHI was leaked.
It states that one of the first objectives is to extract more money from taxpayers through a "healthcare tax" that will be used to improve public healthcare, among other things.
The document that was leaked to the media was sent to the ANC's secretary-general, Gwede Mantashe, in July.
The NHI is an envisaged system to which all South Africans will have to contribute in exchange for basic medical services. Provisional estimates indicate that the state will forcibly extract an additional R80bn to R100bn a year from taxpayers to finance the system.
The current document does not give an indication of how the money will be spent or controlled. But calculations indicate that taxpayers will pay 12.3% to 15.4% more.
Alex van der Heever, an independent health economist who formerly acted as a consultant to the Department of Health, said the effect of the additional tax burden on the economy is still to be properly investigated.
He finds the way in which the money will be managed concerning.
No parliamentary check
The report proposes that government funds be allocated to the NHI authority on an off-balance-sheet basis. "This means it will not be under the supervision of the National Treasury and Parliament. In view of the large amounts involved, this cannot be approved." The plans for the NHI do not - as in similar systems overseas - make provision for an independent council or board that is able, inter alia, to dismiss the chief executive. This opens the door to large-scale political interference.
Also mentioned in the document is that medical funds will apparently not disappear.
The document provides for people still being able to take up their own medical cover after contributing to the national system.
They will however no longer be able to claim tax rebates on their contributions.
The ANC hopes to have the new system operational by 2014.
The process to achieve this provides for consultation with public and private interest groups, a review of the relevant legislation and the drawing up of new laws that include the NHI, among other things.
The plan also provides for increased funding for public health services from general tax, the improvement of the public health infrastructure, the setting up of programmes to improve quality and develop human resources, reads the document.
Research done by the Financial and Fiscal Commission has however found that government expenditure on state hospitals needs to be sharply increased over at least 15 years to bring these hospitals to the same level as those in the private sector.
According to the document an attempt will be made to keep administrative costs to a minimum by using existing registration and collection mechanisms.
Progressive taxation
The plan is apparently to create an NHI authority as a national body, with structures at regional and district level as well. This would replace the authorities currently handling the financing and contracting of health services in the province.
Progressive taxation is proposed - which means the more you earn, the more you pay. Government will continue financing public hospitals, but will also contract-in private hospitals. Van der Heever said the NHI authority would require an estimated budget of R8bn a year.
"Before any health services are paid, an organisation will be established with a budget equal to eight academic hospitals the size of the Johannesburg hospital," said Van den Heever.
- Sake24.com
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