IRR will fight NHI bill with ‘all the resources at its disposal’

The Institute of Race Relations (IRR) says South Africans should be “deeply” alarmed by the approval of the controversial National Health Insurance (NHI) Bill and vowed to oppose its implementation with “all the resources at its disposal”.

On Tuesday, the National Assembly approved the bill that will pave the way for the introduction of universal health insurance. The health financing system is designed to pool funds to provide access to high-quality, affordable healthcare to all South Africans.

It now needs to go to the National Council of Provinces (NCOP), and if passed there, it will be referred to President Cyril Ramaphosa to sign into law. 

Trade union Solidarity said it was gearing up for a court challenge to the bill.

The IRR expressed concern at the approval of the bill “without knowing how much it will cost”.

“In March 2022, finance minister Enoch Godongwana said that the government had not updated the cost model of the proposed NHI scheme since the 2019/20 financial year, before the Covid-19 pandemic.

"In 2019 [former] health minister Zweli Mkhize said annual costs were likely to exceed the combined total [R470bn] of public and private health spending that year. Both he and his successor, Dr Joe Phaahla, have been adamant the NHI must proceed ‘regardless of its costs’.”

The organisation went on to say: “The tax increases required to generate at least R470bn a year (and more likely R700bn a year by 2026) will be high.”

The IRR added SA already carried one of the highest tax burdens in the world, with a very small tax base. It said in addition, its public debt remained high. From 2022, the country’s gross loan debt as a percentage of GDP stood at 71%.

“The Treasury warned in its October 2019 medium-term budget policy statement that NHI costs were ‘no longer affordable’, given the country’s ‘macroeconomic and fiscal outlook’ at the time.

“This echoes an earlier warning by the Davis tax committee, which stated in 2017 that the NHI was ‘unlikely to be sustainable’ without faster economic growth, which has not transpired and is unlikely to be achieved. It is irresponsible for the government to press on with the NHI Bill in the face of these important warnings.”

The IRR questioned whether money collected for the scheme will actually be reserved for that purpose and not general government spending, especially given government’s well-documented poor track record when it comes to spending public money. 

The IRR said implementing the bill “will result in the exodus of many health professionals because they believe the NHI will ‘destabilise’ healthcare rather than improve it”.

“Many are also reluctant to subject themselves to the NHI’s comprehensive controls over their fees and treatment decisions.”

IRR campaign manager Mlondi Mdluli urged the NCOP to oppose its implementation.

“The IRR will oppose the NHI with all the resources at its disposal. The government should rather focus on fixing what is broken instead of breaking what works,” he said.

With Bloomberg

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