AfriForum on budget speech: Bailouts and NHI remain concerning

Finance Minister Tito Mboweni’s budget speech for the 2019/2020 financial year indicates an attempt to rescue South Africa’s floundering economy, as well as state-owned enterprises. According to AfriForum, bailouts (among others to Eskom) and the financing of the proposed National Health Insurance scheme (NHI) – will tighten the noose around taxpayers’ necks even more.

State-owned enterprises, including Eskom

Treasury revised their contingency reserve upwards to R13 billion to respond to state-owned enterprises’ requests for financial funding. AfriForum welcomes the Minister’s announcement that the application process for financial support will be much more stringent this year “However, it remains concerning that taxpayers will once again have to foot the bill for the mismanagement of state-owned entities,” says Natasha Venter, spokesperson for AfriForum.

Mboweni’s announcement that the debt-laden Eskom will receive a bailout of R69 billion over three years (R23 billion per year) is worrying. Mboweni announced that Government will not be taking on Eskom’s debts as its own and that the bailout to Eskom is contingent on the appointment of an independent person responsible for the restructuring of the power utility. “However, it remains unfair that taxpayers are once more held accountable for the massive levels of mismanagement at Eskom, especially as Eskom recently applied for a tariff increase,” says Venter.

National Health Insurance

Treasury appointed R717 billion for health services, including the implementation of the NHI. The public health sector is being woefully mismanaged, and funds are misappropriated yearly. Furthermore, one of the main funding options for the NHI will in future necessarily come from a surcharge on taxable income.

“AfriForum is of the opinion that the NHI is politically motivated and that it will not materially improve the health outcomes of the poorest and most vulnerable members of society. The misuse of taxpayers’ money is a national crisis and this scheme will only contribute to the crisis. It is time for taxpayers to put pressure on the National Prosecuting Authority to make examples of heads of departments who do not fulfil their duties as prescribed by the Act. They are some of the biggest culprits in the misuse of taxpayers’ money.

“When one considers the high levels of poverty and unemployment, the small tax base and the poor performance of the public health sector, it is difficult to envision how a government-funded system that promises ‘free healthcare for all’ is appropriate for South Africa. The NHI scheme is based on a government administered, centrally controlled, single-payer model. Whether directly or indirectly, government will control the availability, financing and delivery of healthcare for all,” says Venter.

The civil rights organisation welcomes the decision that personal income tax was left mostly unchanged, as taxpayers are already suffering under the yoke of various hidden taxes. “Furthermore, South Africa has one of the largest cabinets in the world and it should be decreased to ensure that only ministries that are necessary for the efficient management of the country are kept intact. State expenditure is astronomical and should also be cut down. The announcement that members of Parliament and provincial legislatures and executives at public entities will not be receiving a salary increase this financial year is therefore a step in the right direction,” concludes Venter.

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