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Huge Decline in Funding for Skills Development

Dr Blade Nzimande

Minister Blade Nzimande has announced what he called a 'huge decline' in skills development levies which are used to fund the Sector Education and Training Authorities.

SETAs are funded by the Skills Development Levy which is paid by employers as part of the tax filings they make to SARS each month. Covid-19 has lead to a big decrease in levies paid.  

It has been widely publicised that the national lockdown as a result of the Covid-19 pandemic has lead to many thousands of businesses closing and staff being retrenched.  Many more businesses had to reduce their hours and cut their staff member's salaries. 

The reduced salary bills would lead to a reduced skills levy income for the SETAs.

To add to the problem, the government allowed businesses to take a payment holiday on the skills levy payments during the initial period of lockdown.

The financial result was announced by the Minister at a briefing today.  The projected R19.4 billion of income for SETAs and the National Skills Fund this year will not happen. They can expect to receive only R11.2 billion.

As the level of funding for workplace training programmes is directly related to the levy income received this will see a significant decrease in funds available for learnerships and similar programmes.

Minister Nzimande announced that his department is reviewing the SETA grant policies and they could be changed because of the change in circumstances.

There was some positive news for workplace training as the Minister announced that skills development activities have resumed in workplaces across the country, and trade testing has also resumed.

The latest list of occupation in high demand was also released today, showing 345 areas of semi-skilled and skilled work where the country is struggling to find enough candidate to fill all vacancies.  

Nzimande called on students and career counsellors to use the information to make informed decisions about study options. He bemoaned the fact that many students are funded with the scarce financial resources available to NSFAS, but they are studying programmes that will not ultimately find them employment. 

Click here for details of the Occupations in High Demand

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