Thank you for inviting me to this very important discussion, where the financial principles and policies that will underpin our higher education system will be developed.
The Constitution
Much has been said about free tertiary education in the local media lately. Our Constitution is clear about it: section 29 states that:
“Everyone has the right:
* to a basic education, including adult basic education and
* to further education, which the state through reasonable measures must make progressively available and accessible”
We welcome the commitment of our tertiary institutions to facilitate increased access to higher education and to ensure that it remains affordable for most individuals and families. Not only is education a fundamental driver of economic development it is also a tool of social justice. It is the great equaliser and social intensifier.
Role of higher education
Higher education is central to the social, cultural and economic development of modern societies. From higher education we expect the delivery of high level professional skills, cutting edge research, and the innovative ideas needed by our society. An educated population is also more able to compete globally, grow the economy and generate the revenue that is required to develop our country.
National Student Financial Aid Scheme (NSFAS)
We realise that paying for higher education, in particular, is beyond the means of the majority of our parents. Therefore, thousands of needy students have been given the opportunity to study at tertiary institutions through bursaries provided by various government departments.
In addition government established the National Student Financial Aid Scheme to enhance equitable access to higher education. The main strength of NSFAS is that it provides student financial aid which creates access to higher education for students who would otherwise not be able to afford it. Over the last decade more than R12 billion has been spent on financial aid to 659 000 students.
However, according to the report of the Ministerial Committee on the Review of the National Student Financial Aid Scheme, 67 percent of all students funded by NSFAS are no longer studying. Of this 67 percent, 72 percent dropped out and 28 percent graduated (page 69).
This is a cause for concern and the report points out that this 72 percent dropout rate is precisely the “revolving door” outcome against which 1997 White Paper warned, i.e. poor students entering the higher education system, but unable to complete their studies, are “revolved” back into poverty. But now; with the additional burden of the student loan debt, which they are unable to repay; they end up unqualified, unemployed and in debt.
Financial literacy
I want to suggest that financial literacy training must accompany sponsorship and funding. Not being used to large sums of money, some students spend their money indiscreetly by buying luxury items. They are also not able to budget and plan so that their money can last throughout the year.
Perseverance and dedication
It is important that our students realise that attending higher education institutions requires application and dedication. There are far too many instances of students who “study” for years and years without successfully completing a degree, or, even worse without a subject.
Not only do these “professional” students waste taxpayers’ money but they rob other truly deserving students from an opportunity to make something of their lives and contribute to society. Attending a university must be viewed with the seriousness it deserves in the full realisation that it will require sacrifice, perseverance and commitment.
Unemployment
There are thousands and thousands who are yearning for an opportunity to study. Among these young people who are mot in employment, education or training, more than 60 percent have completed grades 10, 11, or 12. Of these 98 000 have university exemption.
In South Africa 870 000 people have lost their jobs since the global crisis began. KwaZulu-Natal lost 220 000 jobs up to the fourth quarter of 2009. When the number of people who have given up looking for work (the discouraged work seekers) is included in the unemployment figures, the statistics are frightening.
KwaZulu-Natal labour force characteristics
* Quarter one of 2008
Population of working age (15 to 64 years): R6.250.000
Labour force: R3.315.000
Employed: R2.652.000
Unemployed: R753 000
Not economically active: R2.935.000
Discouraged work seekers: R183 000
* Quarter two of 2008
Population of working age (15 to 64 years): R 6.273.000
Labour force: R3.359.000
Employed: R2.614.000
Unemployed: R745 000
Not economically active: R2.914.000
Discouraged work seekers: R167 000
* Quarter three of 2008
Population of working age (15 to 64 years): R6.295.000
Labour force: R3.312.000
Employed: R2.631.000
Unemployed: R690 000
Not economically active: R2.997.000
Discouraged work seekers: R224 000
* Quarter four of 2008
Population of working age (15 to 64 years): R6.318.000
Labour force: R3.321.000
Employed: R2.631.000
Unemployed: R690 000
Not economically active: R2.997.000
Discouraged work seekers: R224 000
* Quarter one of 2009
Population of working age (15 to 64 years): R6.340.000
Labour force: R3.248.000
Employed: R2.514.000
Unemployed: R733 000
Not economically active: R3.093.000
Discouraged work seekers: R271 000
* Quarter two of 2009
Population of working age (15 to 64 years): R6.362.000
Labour force: R3.043.000
Employed: R2.457.000
Unemployed: R586 000
Not economically active: R3.319.000
Discouraged work seekers: R448 000
* Quarter three of 2009
Population of working age (15 to 64 years): R6.384.000
Labour force: R3.024.000
Employed: R2.458.000
Unemployed: R566 000
Not economically active: R3.360.000
Discouraged work seekers: R480 999
* Quarter four of 2009
Population of working age (15 to 64 years): R6.405.000
Labour force: R2.983.000
Employed: R2.409.000
Unemployed: R574 000
Not economically active: R3.422.000
Discouraged work seekers: R452 000
Unemployment among our young people is frighteningly high. Statistics South Africa reports that 48.3 percent of young people between 15 and 24; and 28.5 percent of young people between 25 and 32 are unemployed.
Percentage
1. By gender
* Male
Unemployment rate: 22.9
Share of unemployment: 51.2
Absorption rate: 48.2
Labour force participation rate: 62.4
* Female
Unemployment rate: 26
Share of unemployment: 48.8
Absorption rate: 35.4
Labour force participation rate: 47.9
2. By population group
* Black Africa
Unemployment rate: 28.6
Share of unemployment: 86.4
Absorption rate: 36.9
Labour force participation rate: 51.7
* Coloured
Unemployment rate: 20.8
Share of unemployment: 9.7
Absorption rate: 51.5
Labour force participation rate: 65.1
* Indian or Asian
Unemployment rate: 11.1
Share of unemployment: 1.3
Absorption rate: 50.1
Labour force participation rate: 56.3
* White
Unemployment rate: 4.9
Share of unemployment: 2.5
Absorption rate: 65.6
Labour force participation rate: 69
3. By age
* 15 to 24
Unemployment rate: 48.3
Share of unemployment: 31.4
Absorption rate: 13.8
Labour force participation rate: 26.8
* 25 to 34
Unemployment rate: 28.5
Share of unemployment: 41.5
Absorption rate: 52.2
Labour force participation rate: 73
* 35 to 44
Unemployment rate: 17.1
Share of unemployment: 17.8
Absorption rate: 63
Labour force participation rate: 76
* 45 to 54
Unemployment rate: 10.8
Share of unemployment: 7.4
Absorption rate: 60.3
Labour force participation rate: 67.5
* 55 to 54
Unemployment rate: 6.7
Share of unemployment: 1.9
Absorption rate: 37.6
Labour force participation rate: 40.3
* Total
Unemployment rate: 24.3
Absorption rate: 41.5
Labour force participation rate: 54.8
While acknowledging the advances that have been made in the first 16 years of democracy, we are well aware that we still have much to do to close the gap between rich and poor. A major concern to us is that the gap between the rich and poor in South Africa is widening, not only between race groups but also within race groups.
According to a report published by the Organisation for Economic Cooperation and Development (OECD), income inequality in South Africa increased between 1993 and 2008, making inequality levels in the country among the highest in the world. I agree with national Higher Education and Training minister Blade Nzimande that only by providing equal opportunities for all, irrespective of social background, can we contribute towards building a nation in which everyone has a stake and a common loyalty.
We are painfully aware of the fact that the needs are many and the budget not sufficient to wipe out centuries of neglect. In addition the recession has bitten into our revenue and while education as a whole has increased its share of the annual budget by 15 percent over the 1996 to 2008 period, higher education’s share of the annual budget has declined by 20 percent.
But it is not only a question of whether or not we have the money; it is a question of how we choose to spend it. Economist and Nobel Prize winner Milton Friedman said: “Nobody spends somebody else’s money as carefully as he spends his own. Nobody uses somebody else’s resources as carefully as he uses his own”.
Given the huge resource gap, it is about time that we treat public money as if it is our own. All government entities must stop wasting money on frills and start focussing on core activities. Many millions can also be saved if we commit ourselves to eradicate fraud and corruption.
We welcome Minister Nzimande’s intention to stop higher education staff members, Student Representative Council (SRC) and council members from having any financial interest in any higher education institution supplier or tender process.
Long term solutions: quality basic education
A report on post graduate studies commissioned by the Council on Higher
Education entitled: Higher Education Monitor, Postgraduate Studies in South Africa: A Statistical Profile, released last year, introduced the term “burden of supervision” to refer to a number of trends highlighted in the report.
South African academics are increasingly burdened with an unrealistically high number of postgraduate students to supervise. The number of postgraduate students has more than doubled over the past 15 years, while the number of permanent academics has only increased by 40 percent over the same period.
The report has also found that on average higher education institutions employment includes only four percent engineers, 5.2 percent natural scientists, and 2.4 percent education specialists. Given the poor quality of our education at many of our schools, can we afford to have so few education specialists? Do we spend enough of our budget to employ specialists? Or do we employ too many non-academic staff members who do not necessarily contribute to the core function of higher education?
In addition to the workload a general observation shared by mentors, is the unrealistically long hours they have to spend doing remedial work because some of the students “are simply not post graduate material”.
Extensive support is also needed for most first-year students to have a chance of obtaining a degree.
Many require an extra year at university, which further requires additional resources. However, measures to assist them are critical, not only for the students’ own sake but also to address the country’s skills shortages. It is therefore critical that we improve the quality of basic education and extend its reach to every young person in this country.
President Zuma and Minister Nzimande emphasised the aggressive positioning of the vocational college system as the main platform for delivery of skills development training. We need far more students at Further Education and Training (FET) Colleges if we want to eliminate our skills shortages.
I thank you.
Issued by: Provincial Treasury, KwaZulu-Natal Provincial Government
30 March 2010
Source: Provincial Treasury, KwaZulu-Natal Provincial Government
(http://www.kzntreasury.gov.za/)
