YOUTH WAGE SUBSIDY – COSATU CANNOT AFFORD TO IGNORE THE FACTS

Refiloe Nt’sekhe

DA Gauteng Provincial Spokesperson

Much has been said about the DA’s march to COSATU House on Tuesday but one thing is clear; the implementation of the Youth Wage Subsidy is vital to tackling youth unemployment in South Africa. Even President Jacob Zuma has acknowledged this and agreed with the DA’s view that COSATU remains the final stumbling block to having this subsidy instituted. This was revealed in a reply to DA Parliamentary Leader, Lindiwe Mazibuko yesterday.

National Treasury estimates that the Youth Wage Subsidy will help create 423 000 jobs for young South Africans. The DA has been calling for the implementation of the Youth Wage Subsidy for ten years and both President Zuma and Finance Minister Pravin Gordhan have stated support for the subsidy in the State of the Nation Address and Budget Speech in 2010. Since then, it has been stalled in NEDLAC by COSATU. Business, government and FEDUSA (SA’s second largest union federation) are for the youth wage subsidy, COSATU is the only roadblock to its implementation.

Other important facts about the Youth Wage Subsidy include:

* It will only cost government R5 billion over three years to implement the youth wage subsidy. The auditor general has found that government loses R30 billion to wasteful expenditure and corruption every year. If we cut down on this waste we can easily afford a R5 billion investment to create jobs for the youth.

* The subsidy will be paid over to complying businesses in the form of a tax credit, and will therefore be administered by the SARS.

* Employers who grow their labour force by employing people between the ages of 18 and 29 will be eligible for the wage subsidy.

* The youth wage subsidy will only be relevant to those employees who earn less than R60 000 per annum. (therefore less than R5000 per month)

* An employer will only be eligible for the subsidy for two years.

* The subsidy will cover 50% of a beneficiary’s wage up to R2000 per month, after that it will cover a smaller proportion up to R5000 per month.

* Projections indicate that it would cost the state R37 000 per new job created. This is much lower than other job-creation alternatives, like the expanded public works programme, which requires a R60 000 investment by government per job created.

* Singapore had huge success with the Youth Wage Subsidy, halving their unemployment between 2003 and 2007 partly due to the implementation of the subsidy.

The DA will continue to advocate for the implementation of this subsidy. It will go a long way to providing our unemployed youth with a stepping stone into the job market and gaining vital work experience. COSATU can no longer ignore these facts or the support for this programme by the Presidency and Treasury.

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