It seems clear that South Africa‚ in the current economic circumstances‚ cannot afford to provide free tertiary education and if it does the only source of income to pay for it would be from higher taxes‚ the trade union UASA says.
“Free education would be perfect in an ideal world. Fact is that South Africans live in a world of unequal incomes and limited income sources‚ seeing that a mere six million workers are taxpayers who already contribute roughly a third of their earnings toward the fiscus in the form of income tax‚” UASA spokesman Andre Venter said on Thursday.
Government could indeed offer free tertiary education under these circumstances‚ but such an offer should include all students and not only the poor as suggested by the minister of higher education‚ Blade Nzimande‚ Venter added.
“The reason is that taxpaying workers already contribute towards education through their hard-earned income tax‚ in addition to paying their own school and university fees.”
Venter added that many poor South Africans paid income tax while many others received grants from the state. The latter were also funded by the taxes paid by the workers.
“While we do not have a problem with this‚ we will have a problem if only the poor should benefit from any form of free education‚ and here is our reason why:
“Should government proceed with providing free tertiary education‚ there will have to be a trade-off. The only source of income to pay for such free education will come from higher taxes which will again have to be paid by the 6 million tax-paying workers. As a consequence‚ savings and/or spending will decrease‚ which will each have its own negative impact on economic growth and job creation.
“In addition‚ if workers have to pay higher taxes and have to pay for their own and their children’s education fees‚ should they be excluded‚ it will amount to double taxation‚” Venter stated.
He said the success of free education would depend on government’s chosen solution to the issue.
“Should they choose to only grant free education to the poor‚ it will be a massive mistake since the pool from which skills can be developed will be limited‚ which will be a counterproductive step against the backdrop of the economy’s dire need for skills‚ a situation South Africa can ill-afford at this point in time.
“Against this background it seems clear that South Africa‚ in the current economic circumstances‚ cannot afford free education‚” Venter said.
A better plan‚ he said‚ would be for government to assist students with the rescheduling of their study debt‚ for instance at a zero or lower interest rate of 2%‚ to prevent students from being burdened with debt for years to come.
“This can be achieved by government starting a student loan fund in collaboration with financial institutions‚ with government subsidising the banks’ interest rates of‚ for example‚ 6%‚ with 4% — leaving students with a mere 2%.”