This will not occur through market forces alone. Our strategy proposes a range of processes to identify national, industry and enterprise and community priority areas for skills development delivery. Once the priority areas are identified at national, industry and enterprise areas, grants are the incentives to encourage reaching the targets in these priority skills areas. General tax incentives have been found to be too blunt an instrument for strategic resource allocation. The problem is how to finance the grant.
Companies enjoy direct benefits from investments in training.
So, it is appropriate as well as desirable that they should contribute to financing the grant. The Green Paper proposed that employer contributions be made through a one to one and a half percent of payroll levy, collected nationally and disbursed through sectoral and national channels. The levy has several benefits over other revenue collecting instruments . Most notably, it spreads the cost of training across all firms. Firms which do not train contribute to the costs of training carried out by others.