NHI is not a healthy idea without a proper plan

2010-10-23 11:35

About four years ago, former ­president Thabo Mbeki ­proposed the establishment of a national retirement fund.

Just recently, a statement was issued saying there needed to be further consultation and ­discussions around the fund.

The ANC’s ­national general council meeting in Durban last month proposed a national health insurance scheme, which in my reasoning will ­remain exactly that, a proposal.

Not much detail was provided save for unclear methods of funding. It is the funding of this proposal that will tell whether it will fly or not.

It would seem the ruling party is in the habit of raising hopes, or more specifically, using the people’s plight to reinforce its success at the ballot box.

In the last election, President Jacob Zuma promised to create 500 000 jobs in his first year in office. Most of those jobs were blown off by the final whistle of the Fifa World Cup match ­between Spain and Holland.

The bulk of the short-term jobs created were as a result of World Cup activities and, as the Local Organising Committee wound down its operations, those short-term gains – which generally contribute very little to sustainable economic growth – were ­reversed.

The announcement about the national health scheme should have been made simultaneously with an announcement for job creation.

How in heaven’s name do you announce a project of this magnitude without enlarging your tax base? It is not enough to simply say taxes and loans will fund the programme. It is also lame to say the rich will have to bear the brunt of footing the bill.

Why not be bold and take money from those individuals who donate handsomely to the coffers of the ANC because it’s them who benefits from ­multibillion-rand deals.

They are most likely to benefit from the spoils that will come with this proposal.

Government had gained a lot of support from both business and taxpayers during Trevor Manuel’s watch as finance ­minister. For the first time ­under our new democracy, ­revenue collection was more than efficient.

Then the recession hit and many jobs were lost. Our ­economy continues to stutter and has yet to come out from under the cloud of instability.

I totally agree with the ­objective of improving our healthcare system and ­optimum benefits for all.

The question is whether this is just ­another empty election ­promise, as was the case with free healthcare for the elderly and children. More often than not, there is no medication in clinics, and there’s a high rate of absenteeism and low morale among staff. Generally, our health facilities are in disrepair.

The unclear funding method on its own could lead to all kinds of problems. Most ­importantly, it may not even be sustainable.

The fact that government and labour are at loggerheads over the 8.6% salary increase tells one that workers won’t ­agree to be taxed further.

The mooted levies and possible VAT increase will impact on disposable income and push ­inflation on health are very high. That will give labour a good reason to demand much higher salary increases, as opposed to the contentious 8.6%. ­Negotiations may start at 10%.

Following the announcement of the national retirement fund, many employers stopped ­implementing plans for ­pension and provident funds.

They were awaiting the ­outcome of the national ­retirement fund.

The premature announcement also created a lot of panic among members of existing ­private-sector funds.

I remember taking calls from fund representatives who ­wanted to know if there was a way of ensuring that their monies did not go to government.

My advice is that medical aid members should hold on to their memberships because the proposed healthcare scheme is several elections away, if it will fly at all.

» Diale is a financial planner. He can be contacted on 078 775 0802

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.

Inside News24

 
/News

Book flights

Compare, Book, Fly

Traffic Alerts
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.