TUESDAY, 4.30PM:
DRAFT legislation proposing a compulsory training levy on companies was unveiled by Labour Minister Tito Mboweni in Cape Town on Tuesday.
The proposed levy will be between 1% and 1,5% of company wage bills, but this may be recouped by businesses running their own training programmes.
The Skills Development Bill was approved by Cabinet on August 6 and is expected to be adopted next year, once it has been discussed in the National Economic Development and Labour Council (Nedlac).
Labour Minister Tito Mboweni said the primary purpose of the levy is to “raise the base” of training in South Africa and improve its quality. The ministry said a national payroll levy should be viewed as a temporary measure. It is aimed at building a training culture in industry and creating more systematic approaches to training. “The success of the levy will be determined by the speed with which it becomes redundant, by improving the private sector’s response to training,” said Mboweni.
Decades of under-investment in skills development have meant that only 3-million, or 20%, of economically active South Africans are skilled or highly skilled, while 7-million are semi-skilled or unskilled.
Meanwhile, the Confederation of Employers in Southern Africa, representing 120 000 employers, has rejected the skills development levy, saying it could be counterproductive. Cofesa director Hein van der Walt said: “We were expecting something positive and we’re totally disappointed. It’s promoting the trend of mechanisation, and relocation to other parts of the world.”
“These bureaucracies and exemptions and all these complicated things don’t create jobs,” he said, adding that Mboweni should have done something positive, and rewarded small businesses carrying out training with subsidies or incentives. “A levy is not an incentive. It’s a disincentive,” he said.