How the budget will
impact on private learning providers
- Posted by Hannes Nel on February 26, 2015 at 10:21 in Training Service Providers
- Back to Training Service Providers Discussions
Not mentioning private learning providers in the
budget speech does not mean that it will not have any effect on us. It most
certainly will and the prognosis is, as can be expected, not a very good one.
Private learning providers need to know how the budget will impact on their
operations and they need to manage their finances in such a way that they will
at least survive in the face of this new monster that already broke down the
door.
A budget, that hits the middle class the hardest,
inevitably hits the private learning institutions equally hard. Private
learning institutions whose learners mostly come from middle class households
will find that they lose learners. One way to overcome this is to see if you
can focus more on offering learning to learners whose tuition fees are paid by
corporates or government institutions.
The focus of the budget, however, is not the most
important effect that the budget has on the financial health of private
learning institutions. The cumulative effect of all the tax increases is the
biggest threat.
• Raising the marginal income tax of all but the
lowest income groups reduce the money available to households for education and
training and reduce the income of learning providers. To this should be added
to effect of bracket creep (tax brackets are shifted 4.2% higher except for the
low income groups).
• Not so luxury home owners (steeper transfer duties
on homes worth more than R2.25-million) and car owners (all facilitators must
have cars) further reduces the nett income of education and training
practitioners.
• The increased electricity levy form 3.5c/kWh to
5.5c/kWh, coupled with the inevitable load shedding has a huge impact on
learning institutions that are dependent on electricity in numerous ways.
• I will mention sin taxes to show that it was
considered. However, sin taxes are a product of the individual’s indulgence in
the good life. The impact on education and training should be minimal.
Private learning institutions will need to find ways
in which to limit the effect of the above on their costs and ability to offer
professional education and training. Examples include;
- going green (gas stoves
and geysers, sun panels to generate electricity, etc.);
- using more efficient
teaching methods;
- limiting travel to the
minimum, etc.
There are a number of opportunities in the budget,
although most are directed at public learning institutions. The initiatives
listed below are spread over a period of three years.
• R640-billion will be spent on basic education.
• R195-billion will be spent on post school education
(including tertiary education and occupational training).
• R3.1-billion will be awarded in bursaries for
aspirant teachers.
• R7.4-billion will be spent on the replacement of 500
unsafe or poorly constructed schools.
• R4.1-billion will be spent on establishing public
libraries.
• University subsidies of R72.4-billion will be made
available.
• The National Student Financial Aid Scheme will be
increased from R9.2- billion to R11.9-billion. Private learning institutions
will need to identify the opportunities that this offers them.
For example, one can negotiate with public learning
institutions to offer learning programmes in partnership with them or on behalf
of them, one can make facilitators, assessors and moderators available to
public learning institutions, one can develop learning materials for public
learning institutions, etc.
In closing, all the money that the government will
collect through taxes will be wasted if it is not spent responsibly. All right,
every political party in opposition to the governing party and every financial
expert harps on this. The following should, however, already have received more
attention in the budget speech:
• The Minister should have explained to us what
government is doing to bring those who constructed unsafe schools to book and
what government will do to ensure that such shoddy work is never delivered
again.
• The Minister should have explained to us what
government is doing to ensure that the increase in the electricity levy will,
indeed, only be temporary.
• The Minister should have explained to us exactly
what government is doing to destroy corruption and why their efforts will work
this time around.
• The Minister should have explained what government
will do to ensure that students who receive bursaries, government subsidies,
stipends, etc. will study hard and achieve success.
• The Minister should have explained to us what
government will do to ensure that public learning institutions will offer good
quality education and training.
• The Minister should have explained to us what
government will do to ensure that government officials will provide a
professional service to the community.
• The Minister should have given us the assurance that
government will lead by example and the President should openly have declared
that he supports the Minister in this respect.
