Matthew Lester: Blade’s failed intervention. Education money is available.

The dust has settled following the chaotic scenes from parliament yesterday. But given the images of police brutality, students being charged with treason and the international press grabbing hold of the story, it may not remain settled for long. Matthew Lester, professor of tax at Rhodes University looks beyond the noise and questions Higher Education Minister Blade Nzimande’s attempted intervention at parliament yesterday. Lester says Nzimande is very mistaken if he thinks his quick talk will settle the matter, although it’s a good place to start. Lester crunches the hard numbers, and his outcome, the money is available, the fundamental question is how it’s being spent. – Stuart Lowman

By Matthew Lester*

If minister of education, Blade Nzimande, really thought a quick intervention, capping next years fee increase at 6%, would be enough, he was very mistaken. There is so much more involved in the transformation of our universities that even a 0% increase wouldn’t turn the tide for long. But it might be a good place to start.

Perhaps percentages are just statistics. And Disraeli said ‘there are lies, damned lies and statistics.’ If, in parliament’s debate of the student crisis next week they would ban quoting percentages that could also be a good start.


We have to start talking hard numbers. If a student fee is R40,000 in 2015, then a 6% increase will make it R42,400 next year. The problem is not so much the extra R2400, but rather, ‘where the hell are students and their families supposed to find R40,000 a year in the first place.’

Over 3 years, R40,000 per annum represents the price of a small car. Actually comparing the cost of a 3-year degree to a car has always been a useful comparison. Because, ask the question, ‘how many cars are sold without a financial package to make them affordable?’ If we didn’t have financial packages to sell cars we would not have a motor industry.

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So why are we then selling degrees, where the benefit is supposed to last a lifetime, on what is essentially a cash package? Answer: ‘ Because we always have!’ And therein lies the problem.

There is no doubt that much effort has been expended on fixing education is South Africa. We have been doing that for 20 years. But we have failed to address the fundamental issue ‘ how is the student going to pay for this?’

Let’s go back to the 6% proposal. If even that was waived the universities would loose the R2,400 per student. So if we take it across a million students that’s R2.4 billion per annum. That seems a lot.

So lets look around for some money. The SDL levy collects R15bn a year off employers. R3bn goes to the national skills fund. R12bn is then forwarded to the more than 20 SETA’s. And we have to ask the question ‘ what is RSA getting for that R12bn? Is it worth more than the dot on the i in the word sh.t?’

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Then comes the youth employment tax incentive. The MTBPS tells us that 36,000 employers of 250,000 young employers have claimed R3.9 billion in ETI. Really? Are those all new jobs? Or are the big employers simply grabbing ETI every time they replace someone?

The money is there. The fundamental question is how it is being spent.

Was there a bright side to yesterday’s chaos at parliament? Yes there was! RSA’s students have been too apathetic for far to long. That’s sad if one considers that it was the students that started us on the road to the new RSA in 1976.

Now that’s changed. In the long run that will be worth a great deal.