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National Health Act, 2003 (Act No. 61 of 2003)

Notices

National Health Insurance Policy towards Universal Health Coverage

Chapter 7 : Financing of NHI

7.2 Economic Environment

 

196. At the time of the publication of the NHI Green Paper in 2011 GDP growth was 3.2 per cent. The NHI White Paper published in 2015 included scenarios based on growth projections of 5 per cent, 3.5 per cent and 2 per cent throughout the estimated period beginning in 2013/14 to 2025/26. However, the recovery from the global financial crisis appears to have been short-lived as economic growth has gradually deteriorated, to 0.3 per cent in 2016.

 

197. The underperformance in economic growth has directly led to a shortfall in expected tax revenue. Notwithstanding tax increases in previous years, the 2017 Budget raised an additional R28 billion in tax revenue, predominantly through higher personal income taxes and fuel levies, to fund existing expenditure programmes. A significant expansion in social expenditure programmes requires a sustained increase in economic growth, and the extent of this growth will determine whether large tax policy adjustments are required to fund NHI. Strong economic growth will limit the need for additional tax measures.

 

198. In this White Paper, after considering several scenarios the following preferred costing option was arrived at, which is a modified costing from the Green Paper on NHI.