31 August 1999
When the "Green Paper on Skills Development for Economic and Employment Growth and Social Development" was launched in March 1998, we said that a Skills Revolution was needed to address the skills backlogs in this country. The Skills Development Strategy was proposed as a central means of triggering such a revolution.
After many workshops and countless hours of consultation and negotiation under the umbrella of the old National Training Board and NEDLAC, the strategy is agreed, the legislation is in place and our plans are drawn. The strategy embraces every national, provincial and local government agency. It is supported by community organisations representing women, youth, civics, rural people and people with disabilities. All three trade union federations - COSATU, NACTU and FEDUSA - are in support, as are Business South Africa and NAFCOC - embracing employers both black and white; large and small and across primary, secondary and tertiary economic sectors. In addition, representatives from the key education and training provider groups are on board.
This extraordinary depth of agreement signifies a near universal commitment to putting people at the centre of our country's reconstruction and development. It's a "rainbow revolution" to develop South Africans! And it represents our nation's determination to address the learning needs of those already in work as well as those seeking to enter or re-enter employment.
The agreement embraces a common shared vision - captured in the purposes of the Skills Development Act: (and I quote)
i. to improve the quality of life of workers, their prospects of work and labour mobility; ii. to improve productivity in the workplace and the competitiveness of employers; iii. to promote self-employment; and iv. to improve the delivery of social services. (close quotation)
But the agreement also embraces the ways in which we are to invest, plan and facilitate learning to achieve this vision. The basic idea is very simple:
We have agreed to work in economically meaningful sectors. Each sector will identify the skills it needs to support its growth strategies, and in the case of government - what skills it needs to deliver its social services. And then each sector will identify priorities, set targets and put in place skills plans to incrementally reach its skill goals. A shared funding framework - the levy/grant scheme - will ensure that whilst everyone pays, those that actually do train are rewarded with grants. Those that do not train will continue to buy skills from the labour market as they have always done - but because they too will have to pay the levy, they will also be contributing towards building the national skills pool indirectly.
What makes this a powerful strategy is that the levy/grant acts as an incentive for strategically directed planning and training. And key stakeholders in each economic sector will set the priorities and targets together - and will be held to publicly account for the actual delivery of the training against the set targets. There will also be new incentives to ensure that the training is quality assured, preferably by the South African Qualification Authority.
Twenty percent of the collective levy revenue will be put aside to address the specific skill needs of the most vulnerable people - such as retrenchees, first time new-entrants to the labour market, those in survivalist self-employment and vulnerable groups such as domestic workers - and for these groups we will set targets linked to new employment or self-employment opportunities. Funds will also be used to train local communities to be qualified for employment when there are new investments in their local area. For example, we are currently training people in the Port Elizabeth area for work in the building of the new SAB plant.
This is literally a strategy for us to lift ourselves up by our collective bootstraps - by sharing the cost, agreeing on the targets, putting in the effort and enjoying the rewards together. And today I am happy to announce that we are about to begin in earnest.
Establishment of SETAs
The first step is the establishment of the change agents that are to oversee the work that I have described. These are to be known as Sector Education and Training Authorities or SETAs. I am proposing to establish 27 in total - and they embrace every area of economic activity in the country. Each one consists of organised employers, trade unionists and representatives from those government departments which have an interest in the work of the particular SETA. For example, the Department of Transport has a direct interest in the Transport SETA and the Department of Education in the Education, Training and Development SETA.
But whether predominantly public, private or mixed, the legal mandate is the same: to promote skills development within the sector. This mandate is sub-divided into a number of sub-functions in the Skills Development Act.
The grant from the levy of the Skills Development Levies Act will be used by SETAs to provide firms with an incentive to invest in better quality, more strategically aligned learning.
Some sectors have been proactive and have anticipated the establishment of their SETAs. These SETAs are setting the pace.
THETA - the emerging Tourism and Hospitality Education and Training Authority, is a case in point. Its stakeholders have been charged with the responsibility of implementing the Business Trust's commitments to deliver 6000 new learnerships in the tourism industry over the next three years. In order to identify the possible areas in which to design the learnerships, they have undertaken a sector skills plan already - and have identified such growth opportunities as the 'bed and breakfast' and eco-tourism industries which require the development of a new mix of skills for those that manage and work in them. The parties to this project will be taking the lessons learnt in the KwaZulu-Natal Danida-funded learnership pilot project and expanding them to new occupations and geographical areas.
Then there is the Mining Qualifications Authority - the MQA - which covers the mining and minerals sectors. It has done a great deal of work, particularly in the development of learning standards and putting in place the systems to assure the quality of learning in the industry. In fact, the MQA has already submitted an application to the South African Qualification Authority to be recognised as the Education and Training Quality Assurer for that industry - as all SETAs are required to do once established. They have also introduced innovations in the way they are partnering with the professional bodies - such as the Engineering Council of South Africa - which will help to ensure that there are work-based career paths that can take workers from "sweepers to engineers".
Different sectors have been pro-active in different ways. My department, together with the Department of Trade and Industry, has financially supported pilot work in the textile and clothing industries. These employers and trade unionists have developed a "multi-skilling" project, supported by an adult basic education and training programme, to help the industry to move up the value-chain and become more resilient in the face of cheap clothing imports. Both clothing, textile and footwear have pioneered tertiary level qualifications which the industry needs to grow - such as the development of the Certificate in Education, Training and Development (Workplace Learning) in partnership with universities in Durban, Pietermaritzburg and Cape Town.
These innovations have been triggered by the Skills Development Act.
One of the key advantages of having a set of institutions such as SETAs is that the lessons learnt in one environment can easily be spread to others. We literally now have a vehicle for accelerating the rate at which we can diffuse learning about how best "to do" skills development throughout our economy. The same vehicles - SETAs - can spread best practices amongst firms in their sectors as well. If Alusaf or Aberdaire Cables are leading learning innovations in the engineering industry (as I believe they are), then others can get to hear about it from the SETA.
The National Skills Authority, which I established in April this year and which has so ably supported me in the establishment of SETAs, now faces a second challenge. It has a key role to play in the transfer of learning from one SETA to the other. The Skills Development Act requires the National Skills Authority to liaise with SETAs and SETAs to work with the NSA. Now that the SETAs are to be formed, this energy for skill formation can begin to flow.
How long will it take before these agents for change begin to deliver real benefits to workers and companies across the board? Well, as I have shown, the benefits have already begun to flow. But we need to go to scale and there is no time to waste. Once I have published the proposed list of SETAs next week, I expect an almost immediate response from industry and government departments. By the end of September, I wish to receive a "letter of intent", and, by November 12, I must receive from SETAs their constitutions and business plans. There has been plenty of warning. The Skills Act was passed last year and the Levies Act in February this year - seven months ago. There is no excuse. It is time for action and delivery!
My message today to firms and organised business and labour is clear. You have to dot the "i's" and cross the "t's" of your SETAs now. We cannot wait any longer. On 1 April next year we plan to start deducting the skills development levy, and we can only do that if we are ready to pay out grants to firms that train according to agreed criteria. Sectors that delay may face the consequences - namely that their levies will go to the National Skills Fund and fund national priorities and not be available for firm-based grants! (Clause 8(3)(c) of the Levies Act provides for this eventuality.)
To the National Skills Authority my message is equally clear. I will not consider delays in the introduction of the levy, so if you have to work over the weekends and late into the night to finalise your advice to me on grant payments, so be it. I expect the rules for grant payments to be in place by the end of this year, so that firms and sectors can position themselves to drive the agenda of skills development forward from April next year.
Year 2000 is the beginning of a new Age. For South Africa, the year will herald in the Skills Development revolution. We have four months to go, and then another three before the levy kicks in. The passing of the Acts were the "ready" call, the President called "steady" when he identified skills development as a priority in his State of the Nation speech. With the establishment of SETAs, I am now calling on employers and unionists in every corner of this country to "GO for Skills