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While many survey violent protests at South African universities with dismay and urge students to get back to their books and their part-time jobs to cover fees, a group of academics has called on government to levy a special tax on the rich to pay for free university tuition for all. The scholars, from a cross-section of institutions, say that it is very clear that the impasse between student protesters on the one side and university administrations and government on the other will not be resolved until fees are scrapped for higher education. The proposal, submitted to a special presidential fees commission team, recommends an extra tax of 10% on the country’s top income earners. There are a couple of problems with this approach, starting with the stark reality that the truly rich siphon off their assets into vehicles where they can’t be used as sources of income tax. Also falling into the bracket of the rich is the shrinking army of entrepreneurs who are propping up the South African economy with jobs while also paying tax to a government that is not making the most of these takings. That group will increasingly be looking elsewhere in the world for an alternative place to do business as it becomes harder to make the numbers work in South Africa. They will take jobs, assets and their income-producing potential with them to friendlier terrain that will reward them for making personal sacrifices to contribute to job creation and economic growth. Then, when you look at who South Africa’s high income earners are – with salaries within line of sight of the South African Revenue Service – you will notice that by global standards these are not particularly rich people. And there aren’t many of them, if you consider that 3m or so people pay an estimated 93% of all income tax collected in South Africa and must also pay for their own healthcare, schooling and other costs covered by tax in other countries. This group of academic thinkers claims that theirs is a democratic model of public interest and public funding, yet it’s hard to see how anyone other than today’s students will benefit – for a very short time – from adding to the taxpayers’ burden. – Jackie Cameron
By Salim Vally, Enver Motala, Leigh-Ann Naidoo, Mondli Hlatshwayo, Rasigan Maharajh and Zolisa Marawu
South Africa’s universities are once again in uproar. Higher Education and Training Minister Blade Nzimande has outlined how higher education should deal with fee increments for 2017. His announcement sparked anger and a great deal of confusion.
Neither smoke from police stun grenades, burning buildings nor officialdom’s smoke and mirrors will solve the problem.
We’re surprised that many didn’t anticipate the fallout from Nzimande’s statement. There are several reasons for students’ anger toward the state and university managements.
The most immediate is that Nzimande’s statement dealt with fee increments but sidestepped the fundamental issue: an ongoing call to make higher education free for all.
It is clear to us that very little will be resolved without reference to this critical demand. All the minister has done is to kick the can further down the road, deepening students’ disquiet and provoking conflict on campuses.
It is disingenuous to scold students for “protecting the rich” and “increasing inequality” through their demands for universal quality education. The state cannot merely exhort citizens to patiently await an increase in economic growth and its trickle downward, while blaming “selfish” students for taking resources allocated elsewhere.
There are revenue sources that can be examined carefully and accessed to fund free education for all, at all levels. This can happen while other social needs are simultaneously met. The most important of these sources is raising more tax from the super rich and stopping the illicit outflow of capital.
Confusion and omissions
Nzimande had insisted that a special presidential fees commission deal with the issue of free education. The commission, which began its work in January 2016, is widely viewed as sluggish and unfocused. Its completion date has been shifted, and there have been complaints about its lack of transparency.
More importantly, the commission’s terms of reference are couched in the language of “feasibility”. Its mandate holds no clear and tangible commitment to exploring “fee free education”. In fact, how the commission’s mandate is understood is itself the subject of conflicting interpretations.
— Gavin Davis (@gavdavis) September 20, 2016
There were several other problems with Nzimande’s statement.
The missing middle: there’s little understanding of what the minister’s announcement actually means for this group of students. Their parents earn too much money to qualify for loans from the National Student Financial Aid Scheme (NSFAS), but not enough to afford university tuition without bank loans.
Some people interpreted Nzimande’s statement to mean that this group would be exempt from paying any fees. This is not true. They are merely exempt from the payment of any fee increases levied for 2017. They will continue to pay the same fees as they did in 2015 and 2016.
Student debt: There was no clarity on the question of student debt.
The approach he outlined for funding students appears to favour student loans from the financial sector. This amounts to a further entrenchment of debt-related financing and profiteering by banking and other financial institutions. Students are particularly disquieted by this element of the statement. They continue to be lent money – a far cry from any concept of free education.
The resource debate: Some commentators have argued that there simply isn’t any more money available for universities. They point out that there are many competing pressures on South Africa’s fiscus which must be balanced against students’ demands.
SA CAN afford Free Education if billions lost to maladministration, corruption, crime & financial mismanagement are recovered #FeesMustFall
— Akanyang Merementsi (@AkanyangM) September 20, 2016
In fact, higher education in South Africa is chronically underfunded – the main reason why universities constantly increase fees. The country spends far less on this sector than many other developing countries. South Africa’s state budget for universities as a percentage of GDP is 0.75%. The Africa-wide average is 0.78%; the proportion of GDP for Senegal and Ghana is 1.4% and Cuba 4.5%.
South Africa’s higher education budget for the 2015/16 financial year is R30 billion. If the government were to spend 1% of GDP on higher education, this would amount to R41 billion. That’s almost four times the reported shortfall caused by 2016’s freeze on fee increases.
The argument about competing national demands can only be used if there’s an honest, open engagement around how and what public choices are made in the utilisation of resources. This includes examining wasteful and vanity projects as well as exploring how much is lost to malfeasance.
More importantly, it’s time for South Africans to have a serious, open discussion about the potential sources of such resources.
Communist Blade Nzimande thinks that universities should decide on their own fee increases. How positively and oddly free market of him.
— Jonathan Witt (@Jonathan_Witt) September 19, 2016
The super rich can pay
We are academics and researchers working at a range of South African universities. In our submission to the fees commission, we made it clear that one potential source is the super rich.
As we argued, a determined state should examine the structure of personal taxation which could be levied for the country’s top 10% of income earners.
This income bracket, together with High Net Worth Individuals – those who have an annual income of more than R7 million or R70 million in accumulated wealth – could generate a substantial increase in available public revenue to fund higher education.
Such an approach, which concentrates on the structural aspects of inequality and uses tax revenues for the purpose of higher education funding, is preferable to the idea of a differentiated approach to the “rich” and “poor”. It supports the idea that those identified with the top net worth pay for their children’s education through taxation, and the distribution of public funds, rather than through an individually-based “wealthy user pays” model.
This is a more democratic model of public interest and public funding than individual philanthropy or subsidy, which is not sustainable.
We are also opposed to the idea of a graduate tax. That too will have racially differential impacts on graduates from vastly different class, gendered and social backgrounds. Some graduates also have more accumulated family and other responsibilities than others, making such a tax an enormous burden.
Road map to free education
We urge the Ministry of Higher Education and Training to immediately set in motion a process which will show its determination to meet the promise of “free education for all”.
It should set out the concrete times frames for its achievements, its immediate and further milestones; as well as the mechanism by which this process will be monitored, especially by students and their accepted representatives. Without such a road map to universal free education, there is little prospect that the present conflict will abate.
The ministry, in setting up this road map, must engage fully with as broad an array of students as is possible. It needs to work beyond the extant formal structures of representation which are likely to be ineffective for the purpose.
We would also like to urge university vice chancellors, working together with students, to call public assemblies for engaging with institutions’ most affected communities. This will elicit greater public understanding and democratic dialogue.
The authors, who did not claim allegiance to any specific political group, are: Salim Vally is Director of the Centre for Education Rights and Transformation and Associate Professor of Education, University of Johannesburg. Enver Motala is Researcher, Social Sciences, University of Fort Hare; Leigh-Ann Naidoo is a PhD Scholar, Wits School of Education, University of the Witwatersrand; Mondli Hlatshwayo is Senior Researcher in Labour Studies and Education, University of Johannesburg; Rasigan Maharajh is Chief Director: Tshwane University of Technology – Institute for Economic Research on Innovation; Node Head: DST/NRF SciSTIP CoE; and Professor Extraordinary: Stellenbosch University – Centre for Research on Evaluation, Science and Technology; Zolisa Marawu is Researcher at the Centre for Integrated Post-School Education and Training, Nelson Mandela Metropolitan University.