The SA Institute of Race Relations (IRR) has slammed the president’s stated intention to sign the National Health Insurance (NHI) Bill on Wednesday afternoon, and warned that the NHI posed a serious threat to the country’s public finances.
The institute said if the NHI was passed it would accelerate middle-class emigration, triggering a sharp decline in tax revenue and scuttle the state’s ability to pay for social grants and services.
IRR chief executive John Endres said under the NHI, SA’s entire healthcare system would be brought under the control of the government, including private health care.
“While middle-class citizens have been able to protect themselves from many of the worst consequences of misgovernance by paying for functioning private services, they will not easily be able to avoid the harm a wholly state-controlled health system does to them and their families.”
He said the South Africans most affected by the introduction of the NHI would be the approximately 1.9-million taxpayers earning more than R500,000 a year.
“These 1.9-million taxpayers play a disproportionate role in funding the state.
“Together, they pay 76.6% of all personal income tax in SA, according to 2024/2025 National Treasury estimates.
“The R565bn they contribute makes up 27.7% of the total revenue the government expects to collect in 2024/2025.
“It also helps pay for social grants for the poor and a raft of other state-provided services.”
He said as business owners, entrepreneurs or skilled employees, these taxpayers played a key role in SA’s economy and these same skills gave them a competitive edge in applications for the international market.
“They will be sharpening their pencils to apply for overseas jobs before the ink is dry on the NHI Bill.”
Endres said if just half of the 1.9-million individuals left the country, the South African fiscus would lose about 14% of its total revenue from the decline in personal income tax alone.
“At the same time as suffering a steep decline in revenue, the fiscus would have to fund a health system, costing in the hundreds of billions of rand, though the exact amount is not known yet.”
He said corporate income tax revenue would also drop as some of the country’s most productive employees left, and companies were deprived of their skills.
VAT would decline as the middle class and wealthy emigrated and started spending their money outside the country.
“The NHI concept is badly flawed and poses a grave threat to SA’s public finances and economy.”
HeraldLIVE
NHI will ravage SA’s public finances, IRR warns
Image: SUPPLIED
The SA Institute of Race Relations (IRR) has slammed the president’s stated intention to sign the National Health Insurance (NHI) Bill on Wednesday afternoon, and warned that the NHI posed a serious threat to the country’s public finances.
The institute said if the NHI was passed it would accelerate middle-class emigration, triggering a sharp decline in tax revenue and scuttle the state’s ability to pay for social grants and services.
IRR chief executive John Endres said under the NHI, SA’s entire healthcare system would be brought under the control of the government, including private health care.
“While middle-class citizens have been able to protect themselves from many of the worst consequences of misgovernance by paying for functioning private services, they will not easily be able to avoid the harm a wholly state-controlled health system does to them and their families.”
He said the South Africans most affected by the introduction of the NHI would be the approximately 1.9-million taxpayers earning more than R500,000 a year.
“These 1.9-million taxpayers play a disproportionate role in funding the state.
“Together, they pay 76.6% of all personal income tax in SA, according to 2024/2025 National Treasury estimates.
“The R565bn they contribute makes up 27.7% of the total revenue the government expects to collect in 2024/2025.
“It also helps pay for social grants for the poor and a raft of other state-provided services.”
He said as business owners, entrepreneurs or skilled employees, these taxpayers played a key role in SA’s economy and these same skills gave them a competitive edge in applications for the international market.
“They will be sharpening their pencils to apply for overseas jobs before the ink is dry on the NHI Bill.”
Endres said if just half of the 1.9-million individuals left the country, the South African fiscus would lose about 14% of its total revenue from the decline in personal income tax alone.
“At the same time as suffering a steep decline in revenue, the fiscus would have to fund a health system, costing in the hundreds of billions of rand, though the exact amount is not known yet.”
He said corporate income tax revenue would also drop as some of the country’s most productive employees left, and companies were deprived of their skills.
VAT would decline as the middle class and wealthy emigrated and started spending their money outside the country.
“The NHI concept is badly flawed and poses a grave threat to SA’s public finances and economy.”
HeraldLIVE
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