Free tertiary education needs funding from public sources: KPMG

08 October 2016 - 12:55 By Ernest Mabuza
A #FeesMustFall protester addresses thousands of UCT students and staff who want the institution to reopen on Monday.
A #FeesMustFall protester addresses thousands of UCT students and staff who want the institution to reopen on Monday.
Image: Ashraf Hendricks

Free tertiary education would not really be free because significant funding would need to come from public sources.

However‚ South Africa faced a number of challenges to realise this dream when compared to countries which do not charge any tuition fees‚ or only charged administration fees‚ a report by KPMG on the economic challenges to accessing tertiary education and providing tuition-free education in South Africa has found.

The study‚ titled “The economics of #FeesMustFall” looked at Brazil‚ Denmark‚ Estonia‚ Finland‚ France‚ Germany‚ Malta‚ Mexico‚ Norway‚ Slovakia‚ Slovenia‚ Sweden and Turkey.

“South Africa’s GDP per capita level in US dollar terms ($5‚844) – an indicator of the relative wealth of a country’s citizens – is only a fifth of the group’s average ($30‚805) and the lowest amongst the countries which provide free tertiary education.”

Countries which do not charge tuition such as Denmark (GDP per capita $52‚214) Finland ($42‚807) and Norway ($72‚441) had a higher GDP per capita than South Africa.

“At the same time‚ South Africa’s top personal income tax rate (41%) is already on par with the group average (41.2%)‚ suggesting that higher personal tax rates to fund free tertiary education might not be feasible.

“At the same time‚ South Africa is struggling with higher levels of inequality‚ poverty and unemployment than the other countries in the group.”

The comparison found that countries such as Denmark (6.6%)‚ Brazil (6.8%)‚ Mexico (5.1%)‚ Sweden (8%) had a lower unemployment rate compared to South Africa at 25.1%.

The study also found that government expenditure on education as a percentage of total government expenditure (19.1%) was high in South Africa compared to the other countries (13.8%).

It found that a relatively high share (12.2%) of government money spent on education was channelled to tertiary education‚ though this serviced a relatively low number of students given that South Africa’s tertiary enrolment rate (19.2%) was significantly below the group average (63.6%).

“This raises questions over the quality of the tertiary education system and the efficiency of expenditure.”

All is not lost‚ however.

KPMG said in the 2015/2016 fiscal year‚ South Africa trained around 15‚000 artisans but also attracted thousands of similarly qualified workers from abroad as a result of the continued lack of artisan skills.

KMPG said this emphasised the opportunity of using artisan and vocational training initiatives as an alternative form of higher education.

KPMG said a complimentary aspect to formal tertiary education was to invest in on-the-job training initiatives.

South Africa ranked 19th globally regarding the quality‚ availability and uptake of on-the-job training programmes.

“To place this into context‚ South Africa ranks higher than tuition-free countries such as Brazil‚ Malta‚ Mexico‚ Slovenia‚ Slovakia and Turkey in its on-the-job training ranking.

“South Africa’s strong ranking points to the private sector being directly involved in augmenting the training provided by the tertiary sector.”

The study said for tertiary institutions‚ a key question was how to increase funding outside the sphere of state financing and tuition fees.

It said options included encouraging private sector to share funding costs; using technology to improve access and getting communities involved to reduce indirect costs like transport and accommodation.