Make universities accessible to all

“I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin, but by the content of their character”. Martin Luther King, Jr.

I think all of us identify with those wonderful words. So, as parents, we strive to improve the character of our children through education, education and more education.

South Africa’s parents are bankrupting themselves in the pursuit of education for their children. And there must be nothing worse for a parent than to admit to that one simply cannot afford it.

But through inflation our universities have become far too expensive for South African families. The model just doesn’t work. And we are seeing the impact as protests become a part of daily life in RSA.

We need some major changes and fast.

I have a dream that attendance at university should be based on merit and not the pocket. So ideally universities should be free. Now how much would that entail in rough numbers?

Lets presume that tuition fees are R40 000 per annum. If there are a million students in RSA that translates into R40 billion. That’s about five times as much as this years personal tax increase. Think again Matthew, that’s not going to happen.

So drop the sights a bit. What if we said that university fees were to drop by R15 000 per student per annum. Maybe that would go a long way in bridging the gap?

And what if we say that the current SDL collection of 1% on payroll collects R15 billion per annum, which it currently does?

So, if we increased the SDL levy to 2% we get the extra R15 billion, then, instead of distributing the collections to the SETA’s, we pay it over to the universities and reduce the fee structure accordingly. Job half done.

‘No!’ they cry, ‘ you cannot lumber the corporate sector with additional tax burden.’

Yes, the likes of British Chancellor George Osborne would like to do away with corporate tax altogether. And world corporate tax rates are decreasing.

But here in South Africa, where corporate tax collections have been dropping in real terms over since the financial crisis, perhaps we have to ask the question ‘ have we not been to kind to corporates? Can we really afford a 28% corporate tax rate, plus the dividend tax package?’

After all, other than graduates themselves, who are the biggest beneficiaries of the output of universities? The corporate sector of course!

SDL is a very efficient way of collecting tax. Its how the tax get spent through the SETAs that we know is the problem. But if an increased SDL went directly to the universities, we could have a possible solution.

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