Higher education levy on pension funds proposed: Another hammer blow for SA investors?

South African politicians are steadily coming around to the way of thinking among student #FeesMustFall campaigners. Instead of pondering whether free tuition is possible, it is increasingly becoming a case of how to find the money to cover the estimated R250bn in the short term – and the funds in the long run. Ideas have ranged from a special tax on higher income earners to a more nuanced system involving graduates repaying the state when they are working. Economic Freedom Front politician Floyd Shivambu reckons a levy on pension funds is a good idea. Granted, there’s a huge amount of money sloshing around in pension funds – but ultimately this means the people who have spent their lives saving diligently to cover their costs when they are too old to work will be stumping up for free university tuition for all. Shivambu’s proposal might sound reasonable in a country where the state – through graduates who become productive taxpayers – provides everyone with a pension that can cover basic living costs, but in South Africa pensioners must largely fend for themselves. Shivambu, like others including Higher Education Training Minister Blade Nzimande, has identified that offering free higher education is an easy ticket to curry favour with potential voters. It is becoming increasingly politically incorrect to suggest that free education is not possible. Shivambu has labelled anyone who thinks otherwise “ideologically bankrupt” and “intellectually lazy”. It’s a pity Shivambu and others don’t apply their sharp minds to more obvious sources of funding: axing swathes of overpaid, under-productive civil servants and dramatically pruning the number of politicians – starting with the obviously corrupt – is a natural starting point. Dipping into retirement investments will only deter savers from channelling funds into these vehicles in the long run. – Jackie Cameron

By Thulani Gqirana

Cape Town – The government has heard the legitimate calls for free education, Higher Education and Training Minister Blade Nzimande said on Tuesday.

In a speech similar to his September announcement on fee increases for 2017, Nzimande assured Parliament that government was listening to the students.

Higher education minister Blade Nzimande
Higher education minister Blade Nzimande

He reiterated government’s interventions in subsidising fee increases for the poor, as well as the missing middle.

“We’ve heard the call from those students with legitimate concerns because as government we have regarded the issue of affordability of post-school education as an important matter and, in fact, free higher education is the policy of this government,” he said.

DA MP Belinda Bozzoli referred to the current student protests across the country as the “worst educational crisis in history”.

“We have a vacuum of leadership. It is a vacuum so vast that it has sucked into itself every possible leadership alternative. Anything goes at the moment in the rush to represent the poor,” she said.

EFF MP Floyd Shivambu said fee free education was possible.

Levy on pension funds

“We stand here to dismiss the ideologically bankrupt and intellectually lazy notion that free education for all is impossible. It is possible.”

He made various suggestions on how the funding could be sourced, including the introduction of an education levy on all pension funds.

This would mean free education would not be a burden on the fiscus, he said.

UDM MP Nqabayomzi Kwankwa proposed a multiparty delegation of young MPs to be sent out to various universities to engage students.

He also suggested that Nzimande make his presentation to students, as opposed to Parliament.

Freedom Front Plus MP Pieter Mulder called for “criminal elements” who burned down property to be arrested.

Those who wanted to go back to class should be allowed to do so, he said.

Nzimande praised universities that were working to salvage what was left of the academic year, and called for students to go back to class.


Source: http://www.news24.com/SouthAfrica/News/university-fee-crisis-under-the-spotlight-in-parliament-20161025