Government sticking to NHI with extra R4.2bn

2018-02-21 14:25 - Lameez Omarjee
medical aid
(iStock) ~ iStock

Cape Town – Government is still dead set on National Health Insurance (NHI), an additional R4.2bn has been allocated to the programme, according to the National Budget.

In his address to Parliament on Wednesday, Finance Minister Malusi Gigaba said that government has continued progressively on the path towards NHI.

“Our social protection systems continue to protect the poorest of the poor and most vulnerable,” he said.

NHI which was allocated R4.2bn will be funded by the amendment of medical expenses tax subsidy.

Implementing NHI is a policy priority, according to the budget review. Additional allocations of R700m, R1.4bn and R21bn are to be made over the next three years.

Ahead of the budget on Tuesday, DA leader Mmusi Maimane red flagged NHI as a long-term risk to the fiscus and implored the finance minister to drop it because it is unaffordable.

The Davis Tax Committee (DTC) previously warned in a report that the uncertainty surrounding NHI is cause for concern. The DTC’s advisory committee stressed the need for engagement on the matter.

“The proposed NHI, in its current format, is unlikely to be sustainable unless there is sustained economic growth,” the committee said.

The committee warned given the magnitude of the funding requirement of the NHI, it would require “trade-offs” with other National Development Plan programmes. This includes social security reforms and tertiary education.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER