NHI will chase South Africa’s biggest taxpayers out of the country

The South African Institute of Race Relations (IRR) warned that placing South Africa’s healthcare system under government control will accelerate middle-class emigration and cause a calamitous decline in tax revenue.

President Cyril Ramaphosa will sign the controversial National Health Insurance (NHI) Bill into law on Wednesday, 15 May 2024.

Under the NHI system envisaged by the Bill, the government will control South Africa’s entire healthcare system. This means that the government will eventually control South Africa’s private healthcare system, too.

“South Africans have seen what happens when the ANC controls critical institutions,” the IRR said in a statement.

“They anticipate that healthcare will collapse, just as with the supply of water and electricity, education, law enforcement, and municipal services.”

To date, middle-class citizens have protected themselves against government failure by using private alternatives, including education, security, and healthcare.

However, they will not easily be able to avoid the harm a wholly state-controlled health system does to them and their families.

According to the IRR, the 1.9 million taxpayers earning over R500,000 per year will be the South Africans most affected by the introduction of the NHI.

“We can assume that almost all of them voluntarily pay for private health care in addition to the deficient public health care they are compelled to fund through their taxes,” the IRR said.

These 1.9 million taxpayers play a disproportionate role in funding the state. Together, they pay 76.6% of all personal income tax in South Africa.

“The R565 billion they contribute makes up over a quarter − 27.7% − of the total revenue the government expects to collect in 2024/25,” it said.

“As business owners, entrepreneurs or skilled employees, these valuable taxpayers play a key role in South Africa’s economy.”

Many have above-average work experience, job skills, education levels and business networks. Losing them will be a tremendous blow to the country.

IRR CEO John Endres said the NHI concept is badly flawed and poses a grave threat to South Africa’s public finances and economy.

He said it is concerning that the Ramaphosa administration is pushing ahead with it despite the constructive criticism and warnings it has received.

“The decision speaks to economic recklessness and a lack of foresight that will impose a high cost on South Africa,” Endres said.

“We will continue opposing the NHI while defending South Africans’ right to choose the health care they want.”

Business Unity South Africa deeply concerned about NHI

Business Unity South Africa (BUSA) said it was deeply concerned by the announcement that President Ramaphosa will sign the NHI Bill into law on Wednesday.

BUSA highlighted that the NHI Bill in its current form has many substantive and procedural constitutional flaws.  

BUSA believes that the legislation is unimplementable and damages the country’s healthcare sector. It also hurts the economy and investor confidence. 

“We support universal health coverage. However, the NHI Bill in its current form is unworkable, unaffordable, and not in line with the Constitution,” BUSA CEO Cas Coovadia said.

“What is especially troubling is that the President is proceeding with the Bill despite extensive constructive inputs made by a wide range of stakeholders.”

He said many stakeholders, including doctors and healthcare professionals, civil society, public sector unions, academics, and business, gave their input.

“The unfortunate consequence is that this version will hamper, rather than promote, access to quality healthcare for all citizens in our country,” he said.

“Consequently, we will pay close attention to the President’s announcement on Wednesday, based on which we will consider our options.”

BUSA said it is considering appropriate legal interventions to ensure the legislation that is finally implemented is in the best interest of the country.