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By alanhammond, 15 January, 2024
Forums
NSFAS

Opinion Piece

The Minister for Higher Education has announced a new government fund, which will pay the fees and expenses to support students from the missing middle at university or TVET college. Good news no doubt for these students, but the money comes from funds intended for raising the skills of workers in the SA workforce. Does this mean the money wasn't needed and our workplaces are sufficiently skilled?

NSFAS has been providing full, and generous, bursaries for the last few years to all students who are accepted into universities or TVET colleges - and who meet the financial requirements. This means a combined household income of less than R350,000 per year.

This has left the missing middle - defined as those with a family income of between R350,000 and R600,000 - without any support.

A new scheme announced by Minister Dr Blade Nzimande and to be administered by NSFAS will give student loans to those who qualify as part of the missing middle.

The funds for this new initiative will come from the National Skills Fund, which is kicking in R1,5 billion - and the Setas who will be contributing R2,3 billion. 

I understand that the NSF was supposed to funding projects, but weren't the Setas intended to pay all of the money they raised back into the sector they work in? How can they have R2,3 billion surplus which can be used for something completely different, like funding students at varsity? (There's a whole other debate to answer that question)

There's an undoubted link between skills development and post-school education, but they are still two very different things.  Higher education is dominated by undergraduate studies - something you do before starting your career - and more theoretical in nature.

Skills development has a lot more to do with the practical skills needed to perform the job, and more focused on older employees who have had some years in the workplace but need continuous education to stay up to date with trends and new industry developments. 

Both are very important for a successful economy. 

Tax

The classic UK political sitcom Yes Minister/Yes Prime Minister delved into the murky world of government doublespeak. It followed the machinations of a UK politician and his battles with the civil servants who were supposed to be helping him achieve his goals - but actually had objectives of their own.

In one episode the senior civil servant explained to the novice Prime Minister how taxes really work. Government doesn't work out how much money they need for their budget and then levy the taxes to get that money. They put taxes up as high as they think they'll get away with and later decide how to spend the money that comes in!

It was meant as a joke - but maybe a joke with a bit of truth about it.

I pondered this when i thought about the Skills Development Levy. Since the SDL was introduced it's supporters have tried to persuade management and business owners that, when run strategically, skills development can have a positive economic impact on the company's performance. In short, it's not just a tax. 

The reasoning behind introducing the skills development legislation, and the funding mechanism that accompanies it, was that there was a problem to be dealt with. That problem - a low level of skill among the South African workforce that needed to be raised if our economy was going to compete effectively in the international economy.

If substantial amounts of money that was raised to deal with the skills shortage amongst workers is now being used to educate young people, is there still a need for the Skills Development Levies Act.

Rather than moving monies around between departments, the government should fund it's projects directly. If there is no longer a need for the funding for skills development it should be lowered or revoked.  It shouldn't be collected and then used for something else. 

I think the truth is somewhat different. Money is still needed to uplift the skills of workers.  The problem is more likely that the hoops businesses have to go through to get access to that money are so difficult that the money has been stuck in the bank. This has possibly led to a perception that it isn't needed for skills development. 

The solution is not to move the money to be used somewhere else. The solution is to streamline the systems so that the delivery of skills development training, and the funding to support it, flows much more smoothly.

Missing middle students should be supported - but not at the cost of failing to support SA workers who should also be supported with lifelong learning.

 


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