Introduction of NHI taxes ‘not immediate’

2011-09-23 08:48

A tax to fund government’s national health insurance (NHI) scheme will not be introduced in the short term, deputy director-general of public finance in the National Treasury Andrew Donaldson was reported as saying this week.

The Hospital Association of South Africa (Hasa) said today that Donaldson had indicated that considering South Africa’s constrained fiscus it would be difficult to raise additional taxes at this stage.

He said discussion papers would be released early next year before financing arrangements for healthcare would be changed.

Minister of Finance Pravin Gordhan has raised several options for increasing the funding required for the NHI scheme, but “no decision had been taken on specific funding arrangements”, Donaldson said.

There would also be continued provision for the revitalisation of hospitals, with major rebuilding projects such as at Chris Hani-Baragwanath hospital south of Joburg.

According to the Hasa statement, Donaldson said that increasing expenditure on public healthcare from 4% to 6.2% of gross domestic product (GDP) – as estimated in the Green Paper on NHI – would place a substantial strain on the country’s public finances.

He also highlighted that the shortage of supplies, nurses and doctors in the public sector would limit the amount that could be spent on NHI.

“A great deal of work also needs to be done to address bureaucratic barriers to service delivery,” he said.

“Merging public and private procurement arrangements will be an important part of healthcare reforms. The integration of supply chain management between public and private sectors could help lower costs and bring modern logistics into the delivery of healthcare in the public sector,” he said.

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