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The tragicomedy of business’s naïvety on NHI

By Martin van Staden

 Published in the Daily Friend on 23 November 2023

Organised business in South Africa continues to engage with the South African government as if both parties were fundamentally bona fide. The reality is that this government is not open to dissuasion from its bad ideas. This is as true for the NHI as it is for other policy proposals. The sooner business realises it is dealing with a bad actor, the better.

On 16 November Business Day reported that South Africa’s big businesses were ‘hopeful’ that the National Council of Provinces (NCOP) would ‘soften’ the National Health Insurance (NHI) Bill. The report paraphrased Business for South Africa’s Martin Kingston as saying, ‘Business groups have been led to believe there will be adjustments for medical schemes’. Kingston is quoted as saying, ‘I would be very surprised if [the Bill] re-emerges as it is today.’

When this article was published, we at the Free Market Foundation (FMF) and the FMF Health Policy Unit could only chuckle. We have seen this movie before, and we have warned big business that this movie will be repeated on an even worse schedule than with ordinary DStv programming. 

Big business, particularly the medical schemes industry, is rightly primarily concerned with section 33 of the Bill, which provides that upon the full implementation of the NHI, medical schemes may offer only complementary benefits for services not covered by the NHI Fund. Business has also, to its credit, warned that raising taxes to fund the NHI would be ineffectual, but also devastating for the already overtaxed economy.

On 21 November Business Day again reported on the matter, confirming exactly what the FMF knew would happen and has warned business to expect: the NCOP select committee adopted the ‘Bill without making any changes’. Business Unity SA chair Cas Coovadia is quoted as saying, ‘We are obviously very disappointed’, after ‘expressing optimism’ last week that the NCOP would be reasonable and make changes to the Bill. 

In a very real way, ‘We told you so’.

Business ought not be disappointed about what they should have seen coming a mile away, and with sufficient forewarning. It was beyond naïve for business representatives to believe the African National Congress would shrug off its harmful ideological preconceptions during an election season.

Immoral concessions

In the second Business Day report, Coovadia once more expressed an oft-expressed opinion by business: ‘We have consistently said we don’t have a problem with NHI itself, [but] certain sections need to be changed.’

Our question at the FMF has been this: what political capital has this mealy-mouthed concession to an immoral policy bought business? 

We have seen different versions of this throughout history.

‘Only some Jews’ in Germany’s Holocaust, ‘only some farms’ in Zimbabwe’s land invasions, and ‘only some liberties’ in America’s war on terror. Without fail, civil society formations, like organised business, organised agriculture, and even watchdogs, have immorally conceded what should be inalienable principles in the naïve hope that doing so will limit harm. 

But it purchased them no capital, of course. The ‘access’ that business ostensibly purchases benefits government, allowing it to co-opt business for its own purposes. Some enterprises might benefit on occasion, but in the long term, ‘access’ only results in the assimilation of big business into big government, destroying the already precarious independence of commerce.

Instead, they should be standing on principle, and reject the whole, immoral notion out of hand from the start. 

The rent-seeking NHI, which will only become another cash-cow for the corrupt while denying ordinary South Africans self-determination in matters of health, is no exception.

The NHI is intended to completely (if not immediately, then gradually) destroy the private healthcare sector in South Africa, which is the envy of the continent. Given this, any future reform-oriented government, whether elected in 2024, 2029, or 2034, will have no choice but to undo the NHI. One hopes this will come in time to save the bulk of the private healthcare infrastructure before it is all looted and mismanaged into the ground. 

Perhaps change will come after all?

Kingston still apparently believes changes will be made to the Bill at some point, with Business Day pointing out that the President might send it back to Parliament.

But even if the NCOP changes course and amends the Bill after this column is published, that will simply mean the Minister of Health – through the extraordinary, unlawful levels of discretion that office is granted by the Bill – will implement whatever is removed from the legislation today via regulation tomorrow. 

This is just another phenomenon that business has been naïve about over many decades. 

With all their moaning about policy certainty, you would have imagined that business would be at the very forefront of the fight against Parliament’s habit of assigning vast, undue discretion to executive functionaries. But I have been in meetings with organised business before, where they indicated in no uncertain terms that they would not push back against unrestricted discretion because their counterparts in government had made it plain that this was ‘non-negotiable’.

Weak state, strong commerce

While government almost always has ‘non-negotiables’, business has been very reluctant to put forth its own conditions. The tragicomedy here is that in this relationship, government is clearly, by far, the junior partner, inferior to business in skill, competence, resources, and even moral integrity. 

An argument can be made that commerce is even more ‘democratic’ than government, as every minute of every day, consumers ‘vote’ for the commercial entities they want to succeed, whereas voters only have this opportunity once every five years vis-à-vis government.

Government’s standing to impose its agenda on business and on society more broadly is entirely unearned. Its power to impose is also almost entirely non-existent, buoyed only by the eagerness with which business and some sectors of society comply with its diktat, despite such compliance being incompatible with their vital interests. 

Big business and civil society would do well to align their perceptions of government power with the reality of government power – or, rather, the lack thereof.

Martin van Staden is the Head of Policy at the Free Market Foundation (FMF).

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