Unless alternative sources of funding are found, the high demands on the National Skills Fund (NSF) are threatening the future of small, micro and medium enterprises (SMMEs) in need of skills and employment-creating mechanisms, said Minister Labour Membathisi Mdladlana.
Mdladlana expressed this concern during his keynote address at the skills-graduation ceremony of the Manufacturing, Engineering and Related Services Sectoral Training Authority (MerSeta) in Johannesburg on Thursday.
Mdladlana said the value of funds being transferred by the sectoral training authorities (Setas) from mandatory grants to discretionary grants was rapidly diminishing due to the 92% skills-levy claim rate amongst large and medium firms of mandatory grants.
During the 2005-2006 financial year alone, a total of R2,3-billion in mandatory funds were received by the Setas, but R2,2-billion was claimed by large and medium firms.
“With the reduced discretionary funds in Seta coffers, chances are that Setas will find it difficult to fund the majority of the new Employment Skills Development Agencies from their discretionary funds,” 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 R500Â 000 from paying skills levy, had resulted in the loss of 294Â 236 SMME companies from the original 368Â 254 that were eligible for levies.
This reduced the contributing number to only 73Â 764 medium and large companies.
He reported that the 80% 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.
“The 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 are going to become the biggest losers from our skills-development initiatives unless an alternative source of funding is found.” — I-Net Bridge