If our universities were free, this is what would happen to the fiscus
Although the government is spending more on higher education, economists are backing away from supporting calls for free tertiary education. The demand on the fiscus would be large, creating another mammoth funding requirement such as a national health insurance. This would force the government to find a steady stream of R40-billion to R60-billion a year, the equivalent of between 3% and 5% of government spending permanently, said Econometrix chief economist Azar Jammine. "It starts assuming a huge order of magnitude not dissimilar to the concept of national health insurance." South Africans would have to absorb tax increases, from VAT to hikes in the marginal tax rate, Jammine and other economists have said, echoing similar cautionary statements from former finance minister Nhlanhla Nene and Michael Sachs, head of the National Treasury's budget office. "You need to increase VAT by 2% or raise the top marginal tax rate from 41% to 50% to fund such an amount," Jammine said. But in a ...
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