“Despite policy commitments to universal health coverage, South Africa continues to face stark inequalities in access to healthcare. Rural and low-income populations experience significant barriers to essential services, with gaps in infrastructure, workforce distribution, and financial protection.
“The World Health Organization’s (WHO) 2024-2025 Midterm Review highlights persistent health inequities and fragile systems, while the World Bank notes that inequality remains among the highest globally, with two-thirds of South Africans living in poverty and limited access to affordable, quality health services. These disparities undermine progress toward equitable health outcomes and exacerbate social and economic exclusion,” according to the WHO and World Bank this year.
In view of this observation, it is surprising that Finance Minister Enoch Godongwana’s Medium-Term Budget Policy Statement, which addresses, among other issues, the allocation of tax credit funds to the National Health Insurance (NHI), continues to maintain this inequality.
In an interview with News24, the minister stated that he would not remove medical scheme tax credits because doing so “would be an attack on the middle class”. There is no justification for the “subsidy” for “higher earners”. Removing these credits from earners above R750,000 per annum would raise R5-billion, on top of the R70-billion the state spent on medical scheme subsidies. The implication is that the policy is progressive, but its implementation is regressive — it exacerbates inequality. This position raises serious concerns for several reasons.
First, the Cabinet approved the National Health Insurance (NHI) Bill, which explicitly states: “49. (1) The Fund is entitled to money appropriated annually by Parliament in order to achieve the purpose of the Act… (2) The money referred to in subsection (1) must be (among other sources) — (ii) reallocation of funding for medical scheme tax credits paid to various medical schemes towards the funding of NHI.”
No ambiguity
There is no ambiguity here. The Cabinet — comprising all ministers and chaired by the president, including the then minister of finance, the late Tito Mboweni — took an informed decision to include the reallocation of tax credits in the bill. The collective’s decision was based on five years of extensive consultation by the Department of Health (2015-2020), which recommended that medical scheme tax credits be a key source of NHI funding. It was a well-calculated decision aimed at advancing equity and social justice in healthcare.
The NHI is not meant to be a consumption expenditure, but a vital component of South Africa’s broader development agenda, aimed at reducing inequality and contributing to economic growth. By pooling resources and risks, the NHI would help to reduce the financial burden of healthcare on households, freeing up resources for other essential needs and promoting economic participation.
Moreover, the NHI would help address the stark inequities in healthcare access and outcomes, where millions of South Africans are forced to rely on under-resourced public facilities, while a privileged few access high-quality care through private schemes.
Second, once the bill was tabled in Parliament, it underwent further scrutiny. Parliament independently consulted South Africans across all provinces and selected districts before the National Assembly passed the bill into law on 12 June 2023, and the National Council of Provinces approved it on 6 December 2023. After five years of deliberation, Parliament endorsed the NHI Bill. In our democracy, Parliament represents the people, and its approval reflects the will of the majority.
While some political parties and stakeholders — many with vested interests — objected, their objections cannot override the democratic process or the majority’s interest.
Gazetted
Third, after Parliament passed the bill, the president reviewed it, publicly signed it into law on 15 May 2024 at the Union Building, and ensured it was gazetted on 16 May 2024, signalling that the voices of South Africans had been heard and respected.
Given these steps, the minister’s stance contradicts the constitutional process. In our governance system, Parliament makes laws, the president enacts them and ministers execute them. Ministers do not have the discretion to choose which laws to implement. The minister of finance’s role is to allocate funds to implement laws passed by Parliament and signed by the president. Suggesting that implementing the Cabinet’s decision “would be an attack on the middle class” risks undermining the democratic process and creates the perception that one individual can override the collective will of the nation.
The NHI represents the collective will of the people, expressed through extensive consultations and a democratic legislative process. Why should narrow private interests trump public interest? Can we still claim to be a developmental democratic state if this happens?
This debate is unfolding at a time when South Africa has just hosted the G20, placing Universal Health Coverage (UHC) as a core priority under the sub-theme “Accelerating UHC through Primary Health Care”. Our country is championing Universal Health Coverage globally, yet domestically the minister of finance’s stance undermines its very symbol — the NHI. The message we risk sending to the world is that Universal Health Coverage is mere rhetoric for South Africa.
The minister’s position appears to defy the constitutional order, where Parliament legislates, the president assents and ministers execute. By questioning the reallocation of tax credits, is the minister not asserting personal prerogative over the collective will of both the Cabinet and Parliament, which represent the majority of the population? DM