Reading today about some research done by Peter Courtney, our next guest, working for Southern Africa towards Inclusive Economic Development, which is a collaboration between local and international research units and the Government of South Africa primary goal to improve the interface between research and policy and the study found that sitaed sector education Training authority enrollments costs more than university enrollments and provide less quality when it comes to output.

Peter is with us now via oom.

Peter, Good afternoon, Good afternoon, John, Good to be with you here today.

I confess almost complete ignorance of the SITA world.

There's been a little bit more focus on it with the Higher Education Minister and the way she appointed boards and the way she has potentially lied about that.

But so SITA enrollments, how do they work?

What do people graduate?

If that's the right word with what were you actually looking at?

Great?

So for some background, the SEATER was founded using from the Skills Development Levee and nineteen ninety nine Act and the basic point is that one percent of payroll goes towards the Skills Development Levee and then this money is spent by the SEATERS on various types of training, including learnerships and internships.

And if we look at how much money they received from this one percent tax on employment and divided by the various avenues of training, we get to really eyewateringly large sums of money per both enrollment and even much higher numbers per certification.

So certification across a range of disciplines because for each I'm not sure what the appropriate vocabulary is here, But for for hospitality, there's a seater for just give us a couple of theater areas.

Yeah, so another one might be a wholesale and retail or services training, and maybe that's a good place to start with some of the structural flaws because there is no systemic analysis of where this training leads if it leads to employment at all.

And when such analysis does take place, such as through the wholesale and retail seater, which is particularly good at research, they find only six point one percent of beneficiaries ever complete their internship program.

Sorry that have completed an internship program reach full time employment.

So there is a problem on both ends of the program.

They're very expensive and they don't lead to employment.

Peter, you said, I watering sums of money make my eyes water.

Yeah, So the average cost for a certified learner And just a note, I'm formerly affiliated with Stellenbosch University and the Bureau of Economic Research is coming out with a excellent report that outlines this better than the initial report.

And from that report, it's found that the average cost for per certified learner is two hundred and thirteen one thousand rand, and once you strip out short courses, that number exceeds five hundred and sixty thousand Rand.

And to put that into perspective, a university course, which is typically far more substantial full time equivalence hours, cost seventy six thousand rand per enrollment.

Keeping in mind that universities also have statutory research obligations and that is included in this number.

And so I can graduate with a BA for seventy six thousand rand.

What do I get for five hundred and sixty K I get a certificate of training.

You get a certificate of training and potentially some NQF points.

The idea was that the QF points would accumulate towards something larger than a certification, but in practice that functionally never happens.

And with that five hundred and sixty K certificate.

I am not terribly employable.

I'm reducing things to quite crude basics here, trying to understand it.

Yeah, that's the stunning thing.

This is a direct tax on employment.

So if we look at that number, it's twenty seven billion per year tax on employment.

And what we get for this is largely unknown, and when it is known, it's functionally nothing.

And another way to put that twenty seven billion number into perspective, we spent six billion last year.

We spent six billion on the employment tax incentive.

So we way to think about it is that we only get back one third of the drag unemployment, which surely employment should be the ultimate objective of both tax policy and perhaps more importantly, services and training policy.

Given the quality of people appointed to seat to boards by Medisine in Kambani, it's hardly surprising that this is a situation we find.

But I mean, is there has there been any historic acknowledgment by the seat environment that they are not doing what they were expensively set up to do.

And not, to my knowledge, there seems to have been very little reflection.

And I think a large reason for this is that because the seaters are funded by an earmarked tax the SDL Skills Development Levy.

This violates most good budgeting principles.

So this means that the money cannot be used outside of the seaters, which leads to chronic underspending.

So currently there's twenty seven billion rand idle and seater bank accounts, with six billion added last year alone.

So there's clearly deep structural problems to how the seaters were set up and functionally what we get for that money.

And yeah, to my knowledge, there have been no major reforms.

Although there have been many gazetted legislation that have updated the original Act, seemingly none have gotten to the core of the issue, which is taxing employment when we have a tragically high unemployment rate.

Thank you very much to Peter Courtney, a researcher associated with Stellenbosch University and SA Tide