DA Youth: Shut down the NYDA; use money to fund critical literacy policy

The DA Youth is today calling for the National Youth Development Agency (NYDA) to be shut down, and for its R370 million annual budget to be used to fund a zero-rating of VAT on books instead.

We are making this call after being presented with yet more compelling evidence that the NYDA has become terminally enveloped in cronyism and patronage. We understand that South African Youth Council (SAYC) President, Thulani Tshefuta, has admitted that nominations for seven of the NYDA Provincial Advisory Boards were reopened for one week in September, four months after the original nominations period closed in April, upon instruction from the ANCYL. The purpose, clearly, would have been to give their deployees, agreed upon by the ANCYL National General Council (NGC) at the end of August, an opportunity to apply for those positions.

An analysis of the associated time line is damning: the original call for NYDA Provincial Advisory Board nominations was made on 17 February 2010, with the window closing on 23 April. For five months subsequent to this, nominees heard nothing from the NYDA, without even acknowledgement of receipt being furnished to applicants.  The ANCYL NGC then sat from the 24-27 of August. Seven days later, on 3 September, the NYDA issued a statement stating they were extending the deadline for nominations until 10 September in seven provinces. After this, things moved at light speed, and by 12 October all candidates were shortlisted, interviewed and all nine boards were appointed and announced to the media, with the overwhelming majority of boards made up of known ANCYL leaders.

This leaves the unmistakable impression that the NYDA Provincial Advisory Board appointment process has been completely usurped by the ANC Youth League for the purposes of cadre deployment and nepotism.

The DA Youth was willing to give the NYDA the opportunity to work. We stand full square behind the notion that the state has a crucial role to play in facilitating skills development in South Africa. This is why we have been campaigning for the introduction of a youth wage subsidy, and for expanded FET college funding, and for the NSFAS income eligibility threshold to be raised. But the fact is that the NYDA has become a crony network that does absolutely nothing to champion the issues that it was purportedly created to tackle. It does nothing to advance youth development, it does nothing to advance economic participation or skills development.

The DA's calculations suggest that the cost of zero-rating VAT on books would amount to just under R300 million a year (at the behest of DA Shadow Finance Minister Dr. Dion George, the Treasury is currently conducting detailed research into the exact cost to the Treasury).

So here is a solution: Scrap the NYDA, use the money to fund the zero-rating of VAT on books - a literacy policy that can actually make a real difference in the lives of ordinary South Africans.

The straightforward question that we should ask ourselves is this: which would be better for South Africa - a dysfunctional NYDA, or a de facto education and literacy subsidy that would expand access to the sorts of basic education materials that many South African families currently cannot afford?

The zero-rating of VAT on books is a critical step that we need to take in addressing literacy rates in South Africa. It is worth quoting from the DA's original discussion document on this topic, to highlight the strong international precedent that exists for this programme, and the powerful benefits it could bring:

When the Latvian government, citing the public deficit, increased the tax rate on books from 5% to 21% in January 2009, sales immediately dropped by 30% and it is estimated that 35% fewer titles were published in 2009.Similarly, on 1 January 2002, the tax rate on books and magazines in Sweden was reduced from 25%, the standard rate, to 6%. Prior to the reduction the most important argument was that book prices would go down and sales would increase, which in turn would facilitate the work of increasing and broadening reading. Their research indicated that the book is a price sensitive commodity, and that if the VAT rate was reduced to 6% sales would increase to the same degree. This in turn happened - sales increased strongly in the first 18 months by 20%, and then subsequently levelled off.

Indeed, Ireland, Norway, the United Kingdom, Brazil, Mexico, the Philippines, Australia, Ghana, and Kenya do not charge any tax on books at all; Sweden, Finland, Iceland, China, Austria, France, Germany, Belgium, Cyprus, the Czech Republic, Greece, Hungary, the Netherlands, Spain, Slovakia, Romania, Slovenia, and Malta all significantly reduce the rate of VAT on books.

All of these countries acknowledge the seminal importance of doing so. They acknowledge that a regressive tax like VAT hurts those at the bottom end the most, and so on essential items, VAT should be downgraded or zero-rated. Why should a tertiary student who is struggling to make ends meet, pay R300 of the R2500 she spends on textbooks, back to the Treasury? The status quo makes no sense. We should scrap the NYDA, and spend money instead on a programme that can make an enormous difference in advancing the lives of young South Africans.

Statement issued by Makashule Gana, DA Federal Youth Leader, November 11 2010

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