JOHANNESBURG – Reducing the state’s wage bill by 5%, or R22 billion, would generate enough cash to put nearly 61 000 students through a three-year undergraduate degree, an analysis from the SA Institute of Race Relations (SAIRR) finds.
That amounts to nearly twice the size of Wits University’s entire enrolled student population in 2013. The #FeesMustFall movement started at the Braamfontein-based university last week and has subsequently spread to campuses across the country in a courageous demonstration of student solidarity.
According to Roshuma Phungo, deputy head of research at the SAIRR, if government cut defence and military spending by 25% another R10 billion would be freed up for education. Eliminating subsidies to parastatals and reclaiming money currently paid by employers to underperforming Sector Education and Training Authorities (SETAs) would yield an additional R45 billion, the SAIRR’s analysis reveals.
Based on figures from its bursaries department – and adding the roughly R25 billion in taxpayer money already directed to university funding – the SAIRR estimates that it costs R120 000 a year to pay for a student’s tuition, accommodation and related costs.
This means that, with just more than 800 000 undergraduates currently at university, an additional R71 billion is needed per year over and above the existing R25 billion.
This could be easily collected via the avenues listed above, which ignore private sources of funding amounting to some R20 billion a year, according to Phungo. The burden on taxpayers would be further alleviated if grants were converted to loans, repayable once graduates are employed.
“Our analysis also did not account for the possibility of higher GDP growth rates or less corruption and wastage in government spending, which would lessen the burden even further,” writes Phungo in a piece on Daily Maverick.
According to HSBC economist, David Faulkner the government wage bill has more than tripled over the past decade as a result of elevated wage settlements and rapidly rising government employment.
It is the biggest component of government spending after debt and interest repayments.
Meanwhile, at 0.8% of gross domestic product (GDP), the SAIRR’s research shows that government spending on education is low by global standards.
The institute’s funding proposal would increase university spending as a portion of GDP to 2.1%, which although on the higher end of the global average, is required in order to close the skills gap generated by South Africa’s socio-economic legacy, Phungo tells Moneyweb.
Risk of losing academic aid if fees fall
Phungo argues that “fees must not fall”, rather, government must increase subsidies to universities. She warns that if fees, or total revenue collected by universities, fall, the first programmes to be cut will be those aimed at providing academic assistance to students who need it.
While she acknowledges that primary-school education needs to be fixed, Phungo insists that in the meantime, university students who have gone through an inadequate education system need extra support.
Disappointed by the consistent underperformance of SETAs – which in Wednesday’s mini-Budget received, along with the National Skills Fund, R1.1 billion in additional transfers of skills levy revenue – Phungo remains a supporter of vocational training.
“We were very disappointed that in yesterday’s mid-term budget the funding for vocational training was cut by R13 million due to under-spending. The fact that there is under-spending when there is such a great demand is a concern,” she comments.
To increase the appeal of vocational training, government, the private sector and high school counsellors need to push the “employability” angle, she suggests.
“Individuals want a degree because they think it is the best way of getting hired.”
If school-leavers are shown that they may in fact have more opportunities with a vocational training qualification than they will with a three-year B.Comm degree, particularly considering the country’s infrastructure pipeline, vocational training opportunities may not be as overlooked as they currently are, Phungo argues.
Although concerned that making higher education free might actually prejudice poor people, in that their taxes would effectively go towards sending rich people to university, Phungo does not believe that it would lead to an undervaluing of education. “This is unlikely with such a high unemployment rate, since it is very much in your interest to get an education in order to later get a job,” Phungo says.