How will SA fund Covid vaccines? Treasury suggests raising taxes

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National Treasury director general Dondo Mogajane. Picture: Ziyaad Douglas, Gallo Images
National Treasury director general Dondo Mogajane. Picture: Ziyaad Douglas, Gallo Images

NEWS


National Treasury is considering raising taxes as one of several possible mechanisms to fund the vaccination drive against Covid-19, Business Day reported.

The government viewed the vaccines as a public good and was committed to financing their rollout, with or without support from the private sector and medical schemes, the Johannesburg-based newspaper reported, citing Treasury director-general Dondo Mogajane.

Other options the Treasury is exploring include widening the budget deficit and reprioritising government spending. The pandemic was a good case for emergency funding, Business Day cited Mogajane as saying.

The department of health has estimated a maximum cost of R20 billion to vaccinate the entire country, while more recent internal estimates done by the Treasury are far lower than this, the newspaper said.

Reducing deaths and illnesses has been seen as the main driver of delivering vaccines rapidly,
Rajeev Venkayya, president of Takeda Pharmaceutical’s vaccines business

Global gaps in access to Covid-19 vaccines are raising concerns that the continued spread of the coronavirus will breed more dangerous versions of the pathogen, weakening medical weapons and further crippling economies.

In a race to catch up with emerging coronavirus variants, wealthy countries are already benefiting from potent vaccines. While the US, Britain and European Union have given citizens about 24 million doses so far – more than half of the shots administered globally – vast numbers of countries have yet to begin their campaigns.

Read: Civil society to push government to be open on Covid-19 vaccine roll-out

Disparities in immunity pose a threat to both have and have-not states. Giving the coronavirus an opportunity to advance and generate new mutants would have significant economic and public-health consequences, adding to the pain as the death toll surpasses 2 million.

Growth forecast

“We cannot leave parts of the world without access to vaccines because it’s just going to come back to us,” said Charlie Weller, head of vaccines at health research foundation Wellcome.

“That puts everyone around the world at risk.”

Countries are relying on effective immunisations to save lives and revive businesses. The World Bank’s projection for 4% growth this year depends on widespread deployment of vaccines. Surging Covid-19 cases and a delay to the delivery of inoculations, however, could limit expansion to just 1.6%.

The department of health has estimated a maximum cost of R20 billion to vaccinate the entire country, while more recent internal estimates done by the Treasury are far lower than this
Business Day

High-income countries have secured 85% of Pfizer’s vaccine and all of Moderna’s, according to London-based research firm Airfinity. Much of the world will be counting on UK drugmaker AstraZeneca, whose vaccine is cheaper and easier to distribute, along with other manufacturers such as China’s Sinovac Biotech.

Of 42 countries rolling out Covid vaccines as of January 8, 36 were high-income countries and the rest were middle-income, according to World Health Organization director-general Tedros Adhanom Ghebreyesus. A growing number of countries are pursuing their own supply deals, in addition to participating in a global collaboration known as Covax.

Future Mutants

Urgency is increasing as the pandemic extends into a second year. New variants that surfaced in the UK, South Africa and Brazil appear to spread significantly faster than earlier versions. Just in the past month, a “new dimension of risk has opened up for the world,” said Rajeev Venkayya, president of Takeda Pharmaceutical’s vaccines business.

Reducing deaths and illnesses has been seen as the main driver of delivering vaccines rapidly, said Venkayya, who worked in the George W Bush administration to develop a US pandemic flu plan and directed vaccine delivery for the Gates Foundation.

Read: SA needs a concise Covid-19 vaccine deployment strategy

“We now understand it’s also very, very important to control transmission,” he said, “not just to protect those most vulnerable populations, but also to reduce the evolutionary risk associated with this virus.”

While there’s no evidence to suggest the current crop of vaccines are ineffective against those variants, future mutants may be less responsive, Wellcome’s Weller said.

Drugmakers say they could tweak their shots to counter new variants within weeks if needed. The likelihood that such adaptations will be necessary has increased, Venkayya said. – Bloomberg


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