Government is looking to fund both the existing deficit and free higher education for poor and working-class students by implementing massive budget cuts, as well as cutting social grants, freezing the roll out of RDP houses and increasing taxes.
This is according to the Mail & Guardian.
The newspaper says free education alone will cost an estimate of R30 billion.
Ray White spoke to chartered accountant Khaya Sithole about funding the project.
He says a lot of people need to understand the distinction between funding and financing in order to understand.
When a person talks about how a particular item or project needs to be financed, it's really a question of where do you get the money to inject money into the system upfront while the funding in itself is a question of how this money gets repaid.— Khaya Sithole, charted accountant
Until we find a way of understanding that if we put people through the education system and in a position to pay the money back in the future, then we should be able to find a way to actually pay for them to get into the system.— Khaya Sithole, charted accountant
The issue here is at the inception point when people are 16 or 17 and have been orphaned or very poor, it is impractical to ask them to pay at the point of inception. At the inception point we are talking about the financing and then after the funding question is how do those people get a way to pay that money once they have jobs.— Khaya Sithole, charted accountant
He says there is a lack of coordination in government's approach and that it has never engaged students on how the project will be rolled out.
Sithole insists cutting social grants is not practical.
Right now the President is withholding a report that in itself identifies various sources of funding and financing, but until we know what exactly is on the table we are all completely stuck.— Khaya Sithole, charted accountant
In South Africa we have a unique situation where the people that are on social grants themselves, they give you 18 years of anecdotal evidence to say that I obviously cannot afford to pay my way through life— Khaya Sithole, charted accountant
The key issue here is that you tend to engage with politicians who themselves are trying to peddle a particular narrative so of course the first thing that they are going to start talking about is social grants but no student in their right minds has ever said lets cut social grants, it is absolute rubbish to contemplate.— Khaya Sithole, charted accountant
We do have a lot of vanity projects that the country engages in that we could definitely cut out overnight.— Khaya Sithole, charted accountant
Click on the link below to listen to Sithole give a break down of the current funding model and why it is not working....