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2013 BUDGET CONNECTS THE DOTS BETWEEN EDUCATION AND JOBS

South Africa has taken somewhat of a financial and economic hammering over the last year. Strikes in the mining sector, a rising current account deficit and a downgrade in sovereign rating have only served to hamper economic improvement post the global financial crisis of 2008. Following President Jacob Zuma’s State of the Nation Address, South Africans were eager to know how the country would design a path to recovery for the next financial year as Finance Minister Pravin Gordhan presented Treasury’s 2013 Budget Speech.

Summarising the key points of the budget, Gordhan acknowledged that, while there has been improvement in the world economy, there were still signs of trouble. The National Development Programme (NDP) will be one of government’s key priorities. The initiative hopes to create millions of new jobs, reduce the current account deficit, ensure continued infrastructure development in the long term, and create special economic zones throughout the country.

Senior Lecturer in the Department of Economics at the College of Economic and Management Sciences, Amanda Fitschen, points out that while the budget makes all the right noises as a planning document, the real proof will be those plans materialising. “One only has to open a newspaper and read about failed projects, monies wasted or spent inefficiently to realise there is a potential gap between plans and reality. We need funding for infrastructure and services but that funding must be underpinned by watertight spending precepts to guarantee value for money and service delivery by the infrastructure in question,” she says.

A budget that exceeds a trillion rand is envisaged to assist with infrastructure development and employment, and spur economic growth. As far as special economic zones go, Fitschen said the policy is not a new one. Government previously earmarked Coega in the Eastern Cape and Saldanha in the Western Cape but never completed the proposal. Special economic zones work on the principle of selling low-cost mass produced goods, thereby creating employment and aiding the economy. She says for this to work, changes must be made in education. “The South African education sector needs attention to ensure the people going through the system, be they school-leavers or university graduates, are really equipped for the real world, with the skills necessary to obtain meaningful jobs and work productively in tough economic times,” Fitschen says.

The Youth Wage Subsidy was a huge talking point before the budget speech, with a number of economists debating how it would work. The Finance Minister explained  that the subsidy would complement existing programmes with  a tax incentive aimed at encouraging firms to employ young work seekers  and would  be tabled for consideration by Parliament. This would help young people enter the labour market, gain valuable experience and access career opportunities.

Moving to the higher education environment, Gordhan revealed that student enrolment is set to rise from 910 thousand to 990 thousand by 2015. With this increase will come a greater demand for work, and Fitschen says matching skills with employment will be crucial to creating more jobs. “Science and maths skills are low compared to international standards and the Department of Basic Education needs to ensure teaching in these subjects is promoted and skills enhanced. If scholars leave school with deficient numeracy skills, it is difficult for higher education institutions to build on faulty foundations.

“I definitely believe right now with literacy and numeracy at low levels and the sheer number of people wanting to enter the job market, we should be focusing on FET and on-the-job training. Given earning potential coupled to skills acquisition, we can boost economic activity and grow the economy to accommodate the workforce,” she says.

In terms of funding higher education institutions, the construction of two new universities in the Northern Cape and Mpumalanga will begin this year.  Fitschen laments the fact that many existing university students leave and do not finish their degrees and believes to solve this problem the university should target specific skills and knowledge. She acknowledges that a degree can greatly enhance the viability of a person’s employment prospects but is adamant that a degree should not just be a piece of paper. “We don’t need hundreds of thousands of people with wishy-washy degrees just because everyone wants to be part of the tertiary sector because it is seen as inferior not to attend a university. We should not erode the value of a degree just because it is a status symbol to have one even if it doesn’t mean you can find a job,” says Fitschen.

Article source: UNISA



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