To see how little distinguishes the lead candidates for the ANC presidency when it comes to policy and ideology, consider their stance on the National Health Insurance (NHI) Bill currently before parliament.
In June 2018, President Cyril Ramaphosa, apparently famed for his consensual approach to public policy, announced that NHI was “coming to you whether you like it or not”. His zeal was exceeded only by his then health minister — now embittered political rival — Zweli Mkhize, who announced NHI as “one of the best things ever to happen to SA”.
Mkhize, whose campaign for the ANC presidency is partly fuelled by a deep sense of grievance for the rare occasion when Ramaphosa relieved a corruption-enmeshed minister from office, was felled by the Digital Vibes scandal at the height of the Covid-19 pandemic. The unauthorised and irregularly executed communications contract for the department of health then headed by Mkhize authorised Digital Vibes to spearhead the department’s advocacy of NHI. He was accused of pressuring his staff to appoint the company linked to his close associates and family. Early in 2022 the Special Investigating Unit argued that the contract “was a money laundering scheme designed to siphon funds to Mkhize’s family while also shielding the family from accountability”.
Ramaphosa also limps into Nasrec with a taint of notoriety, as the Phala Phala saga weighs him down with the excess baggage of scandal, while his once soaring personal popularity with voters takes a hit along with the plummeting electoral fortunes of his party.
Leaving aside the scandalous origins of the Digital Vibes saga and the unrestrained enthusiasm of both candidates for NHI, the communications and advocacy strategy for the scheme was revealed in parliament recently to have been a chimera. It is simply extraordinary that perhaps the most far-reaching fiscal bill of a generation, which could also abolish private medical aid schemes and remove patient choice in treatment and care, arrives before the legislature with no costings and no specific financial framework, let alone successful dry runs to assess its operationality.
The current health minister, Joe Phaahla, untainted by scandal but drinking deep in the well of ideology and the dregs of old-style statism, offered blithe dismissals of genuine concerns raised by healthcare experts and economists. He brushed away red flags on the risk to our barely repaired sovereign balance sheet and the fiscal constraints outlined as recently as October 28 in the medium-term budget policy statement (MTBPS) tabled by cabinet colleague Enoch Godongwana.
One wonders if the spending minister (Phaahla) and the Treasury’s political head (Godongwana) actually talk to each other. In the event, it must resemble a dialogue of the deaf.
Consider on the one hand Godongwana’s warning that many of the risks he outlined in his main budget in February have now “materialised”. These include global crises — war in Ukraine, slowing global growth and rising inflation — as well as locally induced constraints to state debt management and growth prospects, which provided him with an even longer list, euphemistically couched as “unreliable electricity supply, costly and inefficient ports and rail, crime and corruption, weak state capacity, and high levels of market concentration and barriers to entry”.
It is striking that on every item on his list, bar perhaps market concentration, the “weak state” he identified and that Ramaphosa leads, bears responsibility or has a monopoly on provision and execution. Noteworthy too, there was not a single word in the Godongwana statement on NHI, despite it being pressed through parliament just three weeks after his speech.
But the finance minister did provide a stark warning when he told parliament that “a small economy like ours needs to be especially careful and have solid fiscal buffers in place to weather the coming storm”.
Last week Phaahla dismantled the finance minister’s guardrail, blithely advising MPs — in the reckless spirit of his president and his ministerial predecessor — that the “government is determined to press ahead with implementing NHI despite the fiscal constraints facing SA”. The costs of this gargantuan scheme and the financing of it were not mentioned. The only offer from the minister was a risible comparison with postwar Britain and its introduction of the National Health Service. Of course, there were no tenderpreneurs and no Digital Vibes in the era of Aneurin Bevan and his successors, and the Labour government at least had a spending plan to offer parliament.
We are left to guesstimate that parliament intends to process a bill with the fiscal implications or funding sources unknown at the time of proceeding, which makes the short-lived disastrous administration of former British prime minister Liz Truss appear a model of financial rectitude. But NHI has generated some numbers, and none of them reassures. Since the current health budget is mostly swallowed by “compensation of employees”, which absorbs 62.5% of the total health spend, and since health itself — despite truly dismal outcomes — accounts for 13.8% of all government expenditure, it hardly seems a theoretical issue as to where the funds for uncosted NHI will be conjured from.
It is also possible, in view of the disaster NHI will inflict on state finances and Treasury credibility, that the initiative is an exercise in utter political cynicism — designed not to be seriously implemented but to buy off public disenchantment with an ever-failing state. For example, Wits public health expert Alex van den Heever noted that in the 11 years since NHI was mooted the department of health has done no financial feasibility model for the scheme, simply referring it to the Treasury.
He notes that “having worked on public policy my entire life, I’ve never seen so little policy work emerge from a team working for such a long period … [producing] so little evidence for the proposal”. Earlier, Van den Heever did estimate that the health minister will be responsible for R450bn of funds to be disbursed from the NHI fund, to be supervised by a CEO and board appointed by the minister. Undoubtedly, Sanral, the Post Office, SAA and the other state-owned enterprises in ruins and bankruptcy are stellar examples to be emulated here.
The NHI white paper estimated that the government would need to raise an extra “R80bn in revenue” a year. The Institute of Race Relations, noting the looming debt crisis in SA, described this as a “thumb suck” and estimated in 2020 that the scheme’s cost in 2010 prices would be R265bn a year. The institute’s calculations — in the absence of anything definitive from the government — suggest that if NHI is fully operational by its target date of 2026 it will cost a staggering R700bn a year. That would need a 31% increase in personal taxes, 63% increase in corporate taxes, or swingeing VAT hikes. As Van den Heever noted, “only a failing health department could generate a proposal like this and take it seriously, let alone expect everyone else to join them in their fantasy”.
• Leon, a former leader of the opposition, now chairs a communications company.