Spend less on ‘fat cat’ salaries and more on education

Free higher education is possible if government spending shifts – IRR.
Wits VC Adam Habib pictured with protesting students. ANC Secretary General, Gwede Mantashe is blaming university Vice Chancellors for the #FeesMustFall protests, as Habib looks set to forego a performance bonus for the year.

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.

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The ANC just need to stop doing UNAUTHORIZED, IRREGULAR, FRUITLESS AND WASTEFUL EXPENDITURE. Or in other words stop stealing money from the people.

They’re ( ANC ) not the only problem. The financial institutions are charging these students ( and us the consumers ) exuberant interest rates, slowly bleeding them and us to death…..discreetly getting away with it.

So just how much is this ‘exuberant’ interest rate?

lets see:
ABSA 16%-23% + bank costs
Fnb 20% + bank costs
Woolworths 22.9%
Edgars 23.2%
For people that lives of credit this is a lot.

Get rid of some of the parasitic, unproductive anc idiotcadres in government and quasi government, and coming down on corruption will easily free up the billions needed. The gold plated bums in the Cabinet must also be whisked away to get rid of the anc parasites and free up money for real, worthwhile causes. It is a well known fact South Africans get no value in relation to tax paid to the anc gutterment.

If they think students protesting at a 10% fee increase is bad, wait until you cut civil servants wages by 5%…

Just remember, students must get loans from Banks at exuberant interest….wait until they start to realize this and turn their protest against these organizations………I will support them all the way. The problem is deeper than we realize!

Cut by 5% and they go on strike, no difference when they “work” they do nothing eat KFC so whats the difference.

It doesn’t take a genius to figure out that, assuming unchanged revenue streams, cutting back expenditure in one area, and re-directing the funds to another, results in a gap being plugged, it’s common knowledge, silly.
Unfortunately, the real-world political dynamics and ramifications to it, which they blatantly ignore, are not as simplistic as all that, as appeasing this bunch here, leads to discontent within that lot over there, and before you know it, you are back to ‘toyi-toyi’ square one.

The SAIRR’s supposed ‘research’ smacks of opportunism, trying to piggy-back on the plight of students is all but a lame attempt at cheap point-scoring.

Fees must fall, but CAN they fall ?
That’s the real issue here.

At long last the students have worked it out this is not a student vs Varsity issue but squarely a student vs inept government issue. The state has been pillaging tax payer monies for themselves and their cadres and front companies for 20 years and given only promises of things to come but have delivered on very little. The expression “the worm will turn” is now about to happen and the demise of the ANC is on the cards over the next 10 years

The situation has “deeper rooted” problems than we think.
Not only is the ANC government responsible, not only are they “stealing” resources by means of corruption but other organizations eg. the Banks are capitalizing on the situation as well. They charge exuberant interest on loans. So a R100 000 course becomes a R 300 000 + course. I hope the students next protest will start against the state to pay back the money and then move on to the Banks, because they are slowly bleeding the consumers to death………..I will support them all the way!

So Chev, how many times are you going to sing the same song underneath this article?

I think it makes Chev feel exuberant. The students find the fees exorbitant or possibly exhorbitant.

you still don’t get it??
If the Financial institutions don’t act pro-actively to decrease interest rates/bank charges the EFF- ANC hordes, the Mathunjwa’s of this land will force them to do it! It has already started yesterday at the JSE. Why wait if they can see the problem come, be one step in front…but I think it is already too late, these institutions will follow the same route as the mines, universities etc.
Please also read Magnus’s article today “How do countries go bankrupt?”

Is is I think simple – get rid of Zuma and his incapable cadre cabinet immediately. Surely the next lot could not cause such destruction and be so corrupt?

start with the ministry of basic education. what a fiasco late delivery of textbooks unpaid/underpaid grade R teachers. still mulling on about home language teaching. sub par matrics leads to a frustrated student at the tertiary institution enter the Blade and his ministry basic incoherence leading to nothing but fancy cars and no money for the student. get rid of both the ministries and thus saving billions for the subsidies required for and by the students. let us have one department of education for the entire country .bring back a sense of responsibility frequent inspection of teachers and teaching methods. get rid of the sad(tu) group who have nothing but their own greed in front of them the students are just cannon fodder for their avaricious attitudes.

Anyone who thinks these protests are merely about fees, and that the demands will stop, is living in a dreamworld.

The real intentions of this movement were clearly made known in yesterday’s Argus, when black student leaders – at the invitation of the Editor, nogal, took over the Argus offices, and were given free reign to write the copy for these 5 pages.

What they wrote would make Mugabe and EFF proud. Anybody who doesn’t think they now have the ANC on the run, underestimates the momentum at work. Zuma has new masters – and the students are sensing they have his power now. Expect the pedal to be floored even more.

And the dear, clueless DA feature nowhere in this future.

Stuart Johnson predicts 2 more years for SA. Seems he is an optimist!

I have said this before – the country is running out of money! its is bailing out saa – Eskom – post office – paying vast amounts to govt employees most of whom are completely under worked. it has made promises to the anc cadres that cannot be met. THAT IS THE REALITY and instead of talking about “if we do this if we do that scenarios” everyone – that’s everyone – should face reality. costs must be cut – and apparently unis are 1st off the starting block. so they need to re-invent themselves. no more fancy courses post graduate courses MUST go. if you want an PHD you find the money and go overseas. the academics and their huge benefits need to be cut. the old white faces must go – that way new black faces can take their places – at a fraction of the cost. close the dormitories (cost too much) – students clean the hall themselves and the outside areas as well – in fact they will be required to do this as part of their courses. you want to live in a 3rd world country – well it has arrived

Why are you still commenting here if you’re in Sydney?

Surely your new country has enough webpages for your to trawl / troll

Quite so. Shut up Robert. Stop crowing that you were able to get off the sinking ship. Most in SA are unable to get out.

End of comments.

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