Nzimande gives flawed Setas a stay of execution
November 5, 2009
Blade Nzimande, the highly articulate Minister of Higher Education and Training, acknowledged there were some who viewed the sectoral education and training authority (Seta) concept as "a swear word", but yesterday gave the 23 institutions - including three in the financial sector - an extended lease of life.
He told a briefing that he wished to announce that "after consultation with the National Skills Authority, I will be gazetting the extension of the... Seta licence by one year, from March 2010 to March 2011".
He has informed all the chairpersons of the boards of Setas and chief executives of his decision. The Setas, which previously fell under the Department of Labour, now fall under his department.
Nzimande acknowledged that some of the Setas were indeed "very weak to the point of being unsustainable" and the period up to March 2011 would be used to discuss the possible merging of some of the entities.
"You will be aware there has been a debate for quite some time now whether the 23 Setas are appropriately and adequately responding to skills development. That is precisely what we are going to tackle head on." There would be focused discussions and debates in various forums, he promised.
One of the issues would be how the Setas would be structured in the financial sector, he said, adding that the Setas had a budget of a not inconsiderable R16 billion a year, with an extra R5bn in the National Skills Fund. He was candid that once companies paid their levies to the Setas it became public money and "we do need to improve this public accountability".
The department's director-general, Mary Metcalfe, acknowledged arguments that the training layoff scheme - which provides a reduced salary for workers and retraining opportunities - was being built on a system that had some weaknesses.
The Setas were responsible for the retraining of these workers. "It is the only system we have," she said, pledging that there would be regular monitoring and public reporting on progress made in the training layoff scheme.
Good time to sell
For many years South Africans believed the best time to get their money out of the country was "yesterday". In other words, the rand could only get worse.
And at the end of 2001, when it took more than R13 to buy a US dollar, that sentiment was particularly strong.
However the currency started strengthening in 2002 to peak at R5.70 to the dollar towards the end of 2004, and it was clear the rand had become a two-way bet. It remains that way, with policy critics now complaining about rand strength.
And investors who sought refuge abroad have often been out of the money - particularly over the calamitous past two years, when the US and UK banking systems threatened to implode.
Chris du Toit, an analyst at Allan Gray, says the JSE's all share index has returned 13.7 percent a year in US dollars over the past 10 years, but world markets have returned only 1.3 percent.
But there is always a case to be made for investing abroad because diversification is important. In Allan Gray's quarterly report, chief operating officer Rob Dower points out that the JSE consists of 370 firms, which make up just more than 1 percent of the world's total listed equity universe by market capitalisation.
And he argues offshore assets are a natural option to build a diversified portfolio.
Moreover, he says, this may be a good moment to make the move. "Simply put, share prices in South Africa have reached a point where generally we are finding more opportunities to sell than to buy."
Du Toit says given current valuations of shares in South Africa, compared with those outside the country, "we would favour a maximum exposure to foreign assets". The question of timing is always tricky because of rand volatility, among other things, but the principle of portfolio diversification is sound.
A case of apples and pears
In Ireland, the salaries of unionists came under the spotlight last month following a survey of the nation's main trade unions.
The best paid unionist was John Carr, the general secretary of the national teachers' union INTO, who earned e172 000, or about R2 million a year. The lowest paid of those who responded was Blair Horan, the general secretary of public services union CPSU, who was paid about e120 000 a year.
The survey prompted a response from the Communist Party of Ireland, which accused the Irish mass media of reinforcing stereotypes about "out-of-touch" union bosses, and of using the issue to "attack the trade union movement, in a bid to dividing and demoralising" union membership.
The party conceded that it had for years pointed out the risk of union officials' salaries "getting so far ahead of the members that they could become a stick with which to beat the whole movement".
Enter Cosatu general secretary Zwelinzima Vavi, who this week admitted his salary doubled to R500 000 this year, at the same time as similar adjustments were made to the salaries of policy experts within the trade union movement.
Even though the amount of his annual increase might raise eyebrows, Vavi's salary comes off a relatively low base and is not particularly extravagant - certainly relative to his colleagues with government positions, one of whom, in one fell swoop, managed to spend about five times Vavi's annual income on two new cars.
Perhaps the point of departure on this issue between Ireland and South Africa is that in Ireland, the Communist Party took the moral high ground. In South Africa, SACP general secretary Blade Nzimande lost all claim to a moral high ground after spending more than R1m on a new car. Vavi has himself made some remarks about his tripartite comrades.
Edited by Peter DeIonno. With contributions by Donwald Pressly, Ethel Hazelhurst and Ingi Salgado
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