EDITOR – A recent debate on the 7.30am ANN7 News Channel about free higher education prompted me to unpack this notion. Many callers to the station contested the notion emphasising that there is no such phenomenon indicating that someone has to be paying for it.
To add to the misunderstanding the Minister of Higher Education was very emphatic about the fact that the government has taken care of the indigent student and only those students who can afford to pay will pay, meaning that the student from an affluent background will not be subsidised. He even questioned the validity of the campaign saying that it was the indigent student fighting for free education for the affluent ones.
That’s sums up the myth. The biggest portion of the money that the government spends comes from the National Revenue Fund, mainly through taxes and levies. Government also borrows from investors and that net debt has gone up from R673 billion in 2009/10 to R1.8 billion currently.
The National Revenue Fund is made up as follows: Personal tax: R441 billion (37.5 per cent); corporate tax: R198.3 billion (16.9 per cent); VAT: R301.3 billion (25.6 per cent); customs and excise: R54 billion (4.6 per cent); fuel levies: R115.7 billion (9.8 per cent) totalling R1,174.8 trillion.
The purpose of providing this detail is to de-mystify the notion that this money belongs to the government when it does not. So in essence these are monies that the government derives from you the tax payer, when PAYE is deducted from your salary at month end, the VAT of 14 per cent when you make purchases at stores be it for food or clothing or any other purchase, the fuel levy every time you fill your tank.
The government does not have any money of its own but it’s these taxes and levies that provide them with the money to run the country. So in essence when the poor ask for free housing or when students fight for free education they are merely asking the government to give back the money that the government has taken in the form of taxes and levies.
In the 2011/12 tax year 4.8 million individuals submitted tax returns and of those 3.3 million were registered as tax payers and it always been claimed that five per cent of the population pay for the other 95 per cent, which is a misnomer given that PAYE only brings in 37.5 per cent of the funds while the balance comes from everyone who fills their tanks (fuel levy) and buys food,clothing and other vatable items. The numbers speak for itself when 3.3 million is compared with a total population of over 55 million. Just the extent of the buying power of more than 50 million people will debunk the notion that five per cent of the population takes care of the other 95 per cent.
However when one juxtaposes this set of facts against the Ministers claim that government is taking care of the poor then by pure logic the affluent should not pay any fees because funds that come from the affluent five per cent that already contribute substantially to national revenue fund (R441 billion) and then to ask the corporate sector to come to the party in making contributions to realise the dream of free higher education is actually a case of double jeopardy in that the corporate already contribute by way of company tax R198.3 billion. It’s also that five per cent who contribute substantially to the fuel levy as the calculus would dictate, they own more of the cars and consequently consume more fuel.
As Minister Gordhan said recently, “stop this nonsense” referring to government wastage through corruption and put a figure of between R40 to R50 billion that is lost annually through systemic fraud and corruption committed by state departments and officials. Simplistically put this would be the panacea for all ills but the government knows fully well that it cannot stem this tsunami of fraud.
Hopefully, the above succinct account, puts this matter into perspective and unpacks this myth, for the voiceless over-tax burdened, law abiding man in the street.
Sicario
Durban
