News | Healthcare Financing
Government eyes pension funds to boost Public Health infrastructure amid budget shortfall
Time to read: 01:26
Time to listen: 03:04
Published on MedED: 10 November 2024
Type of article: News
MedED Catalogue Reference: MNG0058
Category: News
Category Cross-reference: Healthcare Financing, Public Health
Keywords: PIC, Budget, Public Health
Top
Type of article: News
MedED Catalogue Reference: MNG0058
Category: News
Category Cross-reference: Healthcare Financing, Public Health
Keywords: PIC, Budget, Public Health
Top
10 November 2024 13:45
South Africa's Health Department and National Treasury are exploring the use of the R2.7 trillion savings pool managed by the Public Investment Corporation (PIC) to fund upgrades in public health infrastructure.
The discussions follow Finance Minister Enoch Godongwana's Medium Term Budget Policy Statement, which made no additional allocations for health despite the upcoming implementation of the National Health Insurance (NHI). The minister noted lower-than-expected tax revenue projections for 2024/25 and urged a focus on alternative funding for public infrastructure projects, including hospital construction.
Health Minister Aaron Motsoaledi has indicated progress in talks about leveraging national savings through the PIC, Africa’s largest asset manager, which oversees government employee pensions. However, this proposal has sparked debate. Critics argue that using pension funds to support public health could undermine the NHI's financial viability and burden pensioners.
Currently, regulations under the Pension Funds Act do not mandate minimum investments in public health projects, potentially requiring legal amendments to channel funds into this sector.
Currently, regulations under the Pension Funds Act do not mandate minimum investments in public health projects, potentially requiring legal amendments to channel funds into this sector.
Activists' and trade unions' concerns reflect the urgency of the situation. The SA Medical Association Trade Union (Samatu) warned that potential budget cuts could worsen existing staff shortages, impact essential services, and increase patient waiting times. Russell Rensburg from the Rural Health Advocacy Project noted that provinces already face salary shortfalls, and further financial constraints could exacerbate delays in procuring medicines and services.
To address these challenges, experts suggest shifting the focus from costly hospital care to expanding primary healthcare and improving system efficiencies.
Despite a 3.5% budget increase to R62.2 billion this year, concerns persist that it will not resolve the deepening funding crisis. The Health Department now awaits revised estimates from the Treasury for next year’s budget allocations.
This story was compiled from various resources including:
6 November 2024 | Politiweb | NHI funding plans remain unrealistic
4 November 2024 | BusinessLive |Treasury may tap PIC for health funding
6 November 2024 | Politiweb | NHI funding plans remain unrealistic
4 November 2024 | BusinessLive |Treasury may tap PIC for health funding
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