Competition Commission cuts back probes due to lack of funds
Long-running health market inquiry paused, pace of market inquiries into public transport and data costs slowed and plans for new investigations cut
The Competition Commission has run short of funds and has been forced to scale back on key market inquiries and investigations until the new financial year begins on April 1.
It has suspended its long-running health market inquiry, slowed the pace of its market inquiries into public transport and data costs, and has cut plans for new investigations, said the Competition Commission spokesperson Sipho Ngwema.
The commission appears set to remain within its operational budget after it was censured in 2018 by the auditor-general for exceeding its approved budget by R78.6m and incurring R128.6m in irregular expenditure for the 2017-18 financial year.
“We are trying to make sure we don’t end the year in the red,” said Ngwema. “We are in engaging with the department [of economic development] and treasury with regards to our serious financial challenges,” he said.
Treasury director-general Dondo Mogajane confirmed there have been meetings with the commission, but did not elaborate.
The commission had a projected budget of R366.7m for the 2018-19 fiscal year, of which 77% came from the department. The rest is expected to come from revenue from fees paid for mergers and acquisitions, treasury documents show.
Ngwema said the commission remains committed to its high-profile health market inquiry, despite suspending its activities for the remaining two months of the financial year.
“It [the suspension] does not undermine [the inquiry’s] work. We did this inquiry because we are very concerned about the issues around the provision of private healthcare. [But] we need to make sure we stick to the resources provided by the fiscus,” he said.
The inquiry was established five years ago to probe the private healthcare industry, and has so far spent R196m on external consultants alone, he said.
The panel, headed by former chief justice Sandile Ngcobo, has examined the state of competition in the private healthcare industry and probed the barriers to patients’ access to care. One of the key issues it has sought to unpack is why healthcare inflation consistently outstrips consumer price inflation by several percentage points.
It published its interim report in July 2018, detailing its diagnosis of the industry, and recommended that the health department consider establishing a supply-side regulator that would oversee both pricing and quality issues.
Percept Consulting CEO Shivani Ranchod said it is important that the health market inquiry completes its work, as the commission and its stakeholders have invested considerable time and money.
“Everyone would feel quite hard done by if it petered out,” she said.
The inquiry began in January 2014 and originally aimed to release its final report in November 2015. It has been repeatedly postponed — partly due to legal challenges, but also because it has been at pains to show it is taking heed of concerns raised by stakeholders at every step of the way.