Health spending must save lives, not fund BEE premiums – IRR

IRR Legal is to urge Parliament’s Select Committee on Appropriations to insert a clause in a new money bill on health spending to make the absence of BEE premiums explicit.

The new bill, called the Special Appropriations Bill, withdraws R754.5 million for the Department of Health. Of this, R722.4 million is allocated to “transfers and subsidies”, and R32.1 million to “goods and services” for a “health systems component”.

The Appropriations Act (2025) defines “subsidies” as “unrequited payments”, meaning that BEE premiums, which are legally capped at 25%, are in fact subsidies. However, National Treasury has indicated that it does not withdraw money to pay for BEE premiums through the “subsidy” channel. That means R0 of the R722.4 million withdrawn for “transfers and subsidies” can go to BEE premiums.

Likewise, of the R32.1 million withdrawn for “goods and services”, R0 can go to BEE premiums. That is not only because of the definition of “goods and services” provided for by the Appropriation Act, but also because of the specific purpose of the R32.1 million withdrawal in the Special Appropriation Bill.

The defined purpose is to “achieve universal health coverage by improving the quality of coverage of health services”, which is distinct from paying BEE premiums.

When paying for medicine, for example, the thing that improves outcomes for patients is not the race of the medicine supplier, but rather the quality of the medicine and the price at which it is procured.

The Zondo Report drew a sharp distinction between “maximum value-for-money” procurement, and the pursuit of other objectives, such as BEE, while urging transparency. The purpose of the R32.1 million is transparently entirely focused on the value-for-money side, since mention is made of health outcomes, and no mentions is made of anything else.

IRR Legal will recommend to Parliament that it make that which is already implicit in the Bill explicit by inserting section 1(4) to say: “No money to pay for preference premiums” out of the R754,5 million “is appropriated from the National Revenue Fund in this Act.”

Says IRR Legal Executive Director Gabriel Crouse: “The tone needs to be set now that no one is going to die to pay for BEE premiums through the NHI. BEE premiums must be zero in health, so that whatever money is there is used to save lives, whatever the race of the patient or the provider.”

Media contact: Gabriel Crouse, IRR Legal Executive Director Tel: 082 510 0360 Email: gabriel@irrlegal.org.za

Media enquiries:

Anneke Burns

IRR Public Relations

+27 71 423 0079

anneke@abpr.co.za