/ 10 February 2011

Zuma announces new jobs fund

Zuma Announces New Jobs Fund

President Jacob Zuma on Thursday announced the establishment of a jobs fund of R9-billion over the next three years to finance new job-creation initiatives.

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In addition, the Industrial Development Corporation (IDC) had set aside R10-billion over the next five years for investment in economic activities with a high job creation potential, he told Parliament in his third State of the Nation address.

“It is also my pleasure … to announce R20-billion in tax allowances or tax breaks to promote investments, expansions and upgrades in the manufacturing sector,” Zuma said.

For a project to qualify, the minimum investment should be R200-million for new projects, and R30-million for expansion and upgrades.

The programme would provide an allowance of up to R900-million in tax deductible allowances for new investors and R550-million for upgrades and expansions.

Zuma said the small business sector was a critical component of the job creation drive.

“We will continue to provide financial and non-financial support to small, medium, and micro enterprises (SMMEs), small scale agriculture as well as cooperatives.

“We need to cut administrative costs, avoid duplication and direct more resources to small business,” he said.

Therefore, consideration was being given to merging the three agencies Khula, the SA Micro-Finance Apex Fund and the IDC’s small business funding into a single unit.

The programmes of state owned enterprises and development finance institutions should also be more strongly aligned to the job creation agenda.

Research had indicated that jobs could be created in six priority areas.

These were infrastructure development, agriculture, mining and beneficiation, manufacturing, the green economy and tourism.

“We cannot create these jobs alone. We have to work with business, labour and the community constituencies. Experience shows that we succeed when we work together,” Zuma said.

Budget deficit seen down to 3 to 4%
Zuma said the budget deficit should fall from its current 6,7% to between 3% and 4% by 2013.

Zuma also said government was pleased with the performance of the country’s financial sector.

“It has proven to be remarkably resilient in the face of the recent financial crisis and the global economic meltdown,” he said.

Zuma also said concerns about the exchange rate had been taken to heart.

“Exchange control reforms that were announced in the medium term budget policy statement last year are being implemented. Further information will be provided by the Minister of Finance in the Budget speech,” Zuma said in his address.

R800m relief for flood victims
Zuma said the government had set aside R800-million for immediate relief to assist communities affected by the recent floods in the north of the country.

“We extend heartfelt condolences to the families of those who lost their lives. Our hearts also go out to those who were injured and who lost all their belongings.

“Let me use this opportunity to announce that government has set aside R800-million for immediate relief to assist communities.”

Funds would also be earmarked to deal with post-disaster recovery and reconstruction in the years ahead.

“We thank relief agencies, non-governmental organisations, private sector, religious organisations and communities for assisting those in need,” Zuma said. – Sapa, I-Net Bridge