3 August 2006
Unless alternative sources of funding were to be found, the high demands on
the National Skills Funds (NSF) were currently threatening the future of Small,
Medium and Micro Enterprises (SMMEs) in need of skills and employment-creating
mechanisms.
Labour Minister Membathisi Mdladlana expressed this concern during his
keynote address of the skills graduation ceremony of Manufacturing, Engineering
and Related Services Seta (MerSeta) in Johannesburg today (Thursday).
Minister Mdladlana said the value of funds being transferred by SETAs from
mandatory grants to discretionary grants was rapidly diminishing due to the 92
percent skills levy claim rate amongst large and medium firms of mandatory
grants.
During 2005/06 financial year alone, a total of R2,3 billion mandatory funds
were received by the SETAs and R2,2 billion was claimed by large and medium
firms.
âWith the reduced discretionary funds in Seta offers, chances are that SETAs
will find it difficult to fund the majority of the new Employment Skills
Development Agencies from their discretionary funds,â he said.
This was also compounded by the fact that the exemption as from August 2005
of companies with an annual payroll that is less than R500 000 from paying
skills levy, had resulted in the loss of 294 236 SMME companies from the
original 368 254 that were eligible for levy a fact that reduced the number
down to only 73 764 medium and large companies.
The 80 percent reduction meant that the amount of levy funds available to
support SMMEs has been dramatically depleted, despite continued economic and
employment growth levels that ensure that the total rand value of levy income
has not decreased.
âThe demands on the NSF are very high and we will not be in a position to
address the plight of SMMEs in the near future. The end result of these factors
is that SMMEs who need the skills most and very important in creating
employment are going to become the biggest losers from our skills development
initiatives unless an alternative source of funding is found.â
Minister Mdladlana stressed the fact that the situation had nothing to do
with the National Skills Fund as out of a total R5 billion the government
collects per annum, only R1 billion goes to the NSF, which then uses the funds
towards skills programmes that target the poor and unemployed.
Enquiries:
Mokgadi Pela
Cell: 082 808 2168
Issued by: Department of Labour
3 August 2006
