Increasing taxes to fund NHI will ‘destroy economy’

Increasing taxes to fund National Health Insurance will destroy the economy, an expert warns, but on the other hand, there is no other way to fund government’s plan for universal health care for everyone unless the private sector gets involved.

Gore pointed out that the country currently spends about R435 per person per month on healthcare in the public sector. It is estimated that NHI will cost R200 billion to R300 billion. Discovery estimates that government would have to increase income tax by 30% or more or increase VAT to 22% to get to R200 billion.

“This illustrates the tragedy of affordability and the level of inequality in the country—that it is not doable without wrecking the employed sector. It is not a healthcare issue. It creates a real economic problem. I do not think people will pay 30% more taxes for 70% less healthcare.” About nine million people are members of medical schemes and Gore says people must remember what is at stake here. “I think just making sure the sentiment is right, that we can keep investing in healthcare, we must make sure these debates support the medical aid we end up with in a piece of law that is workable.

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