Skills Development Bill [B81-98]: hearings

Meeting report

LABOUR PORTFOLIO COMMITTEE
18 August 1998
SKILLS DEVELOPMENT BILL [B81-98]: HEARINGS

Documents handed out
Presentation of the Skills Development Bill
Nedlac report on the Skills Development Bill
COSATU submission
Society for Industrial Psychology Submission
FEDUSA
Local Government Education & Training Board
Business South Africa
SALGA Submission
Submission by Association of Personnel Service Organisations
Department of Constitutional Development Submission
Ancillary Health Industry Board Submission

SUMMARY
The meeting was held to receive public submissions on the Skills Development Bill. It should be noted that this Bill is different from the previously published draft Bill. In line with the Constitution all financial matters must be dealt with by the Minister of Finance. Hence the levy issue has been separated from this Bill and will be covered by a new bill issued by the Department of Finance. This bill will however go through the Labour Portfolio Committee.

MINUTES
The Director General of Labour, Mr S. Pityana, read out his introductory presentation. Ms A Bird, Chief Director: Human Resources & Services, presented an informative slide presentation on the Bill (available shortly).

Discussion
Mr T Leon (DP) said that discussing this Bill without the Skills Development Levies Bill being available was an exercise in futility. In response, the chairperson said that the new funding bill would be the same as the original bill, and was to be issued very shortly. The two bills will definitely go through parliament this session.

A committee member asked if the department envisaged any tax relief granted on the 1% levy paid by employers?
Response: No, as companies that undertake skills training will receive a grant.

Mr C Abrahams (NP): Will the contract between the employer and the learner force the latter to stick to the contract?
Response: Yes, it will impose an obligation to adhere to the contract.

Mr B. Bunting (ANC): How will contact with unskilled persons be made? What mechanisms will be put in place to achieve this?
Response: It is envisaged that Labour Centres in the Department of Labour will be informed of opportunities that exist. People will be invited to submit their names and the department will then inform employers accordingly. Also it must not be overlooked that many employers will commence in-house (i.e. existing unskilled) training.

The department has a pilot project which has been running for the past year and this has proved highly successful. The levy will not be introduced before 2000 in order that Sector Education and Training Authorities (SETAs) may first be established.

Submission by the Business South Africa
Mr Angus praised the Bill and said that BSA was satisfied with most provisions. They were particularly pleased with the linkage of this legislation to the Government’s macro-economic policy. BSA was however unhappy about certain aspects of the funding arrangements and Mr Angus felt the solution to this will be a further negotiation process.

Dr Dippenaar then spelt out the significant concern BSA has with regard to the 20% "skim off" the 1% levy on companies' payrolls. It is unacceptable to BSA that these funds will be taken out of the hands of business and into the hands of government. One of the reasons for not wishing the government to have sole control of the National Skills Fund is that BSA is concerned that the government will use the funds for cross-subsidation, that is, not restrict the funds to the particular sector which raised the funds.

They wish to discuss the following proposals with the Minister of Labour:
1 BSA would like to see the "skim off" the 1% levy reduced from 20% to 10%.
2 "Skim off" should only be applicable for a period of three years.
3 After three years the scheme should be reviewed to establish whether it is still appropriate, and whether it has been effective and efficient .
BSA feels that the government should contribute a pro rata amount to the fund from the fiscus.

They would require determination of the needs beforehand and not merely build up funds in the Fund in excess of needs, which may result in "wastage spending".

The chairperson said that it would probably be appropriate to raise these points when the Skills Development Levies Bill is tabled by the Finance Department.

Submission by COSATU
This was made by Mr. Michael Tshehla

The rest of the meeting was not minuted.