Red Tape Hampering Business

Mike Moriarty MPL

DA Gauteng Spokesperson for Finance

I read the Redi Tlhabi column (Sunday Times 1 July 2012) with great interest.

Ms Tlhabi expounded her views on the problem where university graduates are unable to find employment because there are just no jobs to be had. She cited the particular case of a psychology honours graduate that now works as a cashier. Ms Tlhabi then trashed the suggestion of a youth wage subsidy and more specifically the idea of a job-seeker grant because such interventions are aimed, as she put it, “at a job that is not there”.

Ms Tlhabi then brings on the silver bullet: entrepreneurship. I would put it to her that no one thing can resolve the jobs crisis. But if she seriously wants the government to promote entrepreneurship then she should challenge the ANC to do something bold as regards the impediments faced by entrepreneurs: an inflexible labour regime and an uncertain policy environment.

She misses a big point regarding the youth wage subsidy: it has worked elsewhere because what it does is enable employers to expand their operations without having to bear the cost of instilling training and experience into the first-time employee. This expansion, in turn, grows the economy. It is this economic growth that creates more jobs.

In short, jobs will be created by a combination of initiatives and programmes. It has to be youth wage subsidy plus labour law reform. It must be incentives for entrepreneurs plus fixing of the education system. There are various other measures that must also be borne to bear, such as the removal of red tape for small businesses.

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