SETA corruption blocks opportunities for youth to participate in the economy
The Organisation Undoing Tax Abuse (OUTA) believes that if Government is serious about creating jobs for our youth, it needs to address the corruption in the Sector Education and Training Authorities (SETAs).
In the SoNA, President Ramaphosa said that agreements between organised labour, business, community and government hoped to create 275 000 direct jobs, in addition to those expected to be routinely created.
He also said the new Youth Employment Service would place unemployed youth in paid internships in companies across the economy.
“The President’s idea is noble, however, its practical application is limited by the corruption-driven failure of the SETAs to fulfil their mandate,” says Dominique Msibi, OUTA’s Portfolio Manager for Special Projects.
“Mr President, OUTA advocates that your higher education priority should be to address the corruption at the SETAs for them to be run and governed effectively,” says Msibi.
“The SETAs are not working. They are paralysed by deep-seated corruption. Students are not paid their stipends, some service providers do not provide the training they are paid to deliver, while some are not paid for their services so stop providing training.”
The SETAs are intended to provide crucial support for young inexperienced people to get enough employment and basic skills to become employable. They are funded through compulsory levies from business, which are meant to fund training and stipends for young job-market entrants. During 2018/19, the SETAs received about R17bn from these levies.
In July 2018, OUTA reported how the Services SETA padded expenses by buying thousands of exam pads at R214 each and lanyards at R166.50 each. In November 2018, OUTA reported how the Services SETA was paying a service provider at least R162m for equipment that wasn’t delivered and for payments meant for stipends which apparently went to bogus businesses instead, leaving the real interns desperately waiting for their stipends.
“The bottom line is that youth who are already marginalised by not being able to attend universities are further being excluded from the economy by the grossly dysfunctional SETAs,” says Msibi.
Not all SETA-funded training is on-the-job training, so the reality is that they may receive skills from SETA-aided training without receiving experience, although experience is usually essential to obtaining employment.
Further exacerbating the challenge is the fact that students walk away from SETA-based training without having been trained because of challenges like failure to pay stipends and being handed over to bogus service providers who provide zero training. The SETAs are simply not fulfilling their mandate, therefore, those jobs promised in the SoNA are unlikely to benefit them.