Patel slammed for lack of youth wage subsidy clarity

This followed promises by Deputy President Kgalema Motlanthe earlier in the week that Patel would give details on the status of the negotiations on the subsidy within the National Economic Development and Labour Council (Nedlac).  

Talks between business, labour, civic organisations and government began after treasury allocated funds to a youth wage subsidy in the 2011 Budget. These have yet to yield concrete results.

The subsidy, for which R5-billion was set aside, was intended to have been implemented by April this year.

Patel told the National Assembly that senior leaders of the social partners had agreed on the need for a compact on youth unemployment.

Core programmes and principals had been identified that included private sector initiatives, on skills, internships and work readiness programmes.

Youth unemployment
A proposal had also been tabled to create a youth unemployment committee at Nedlac.

"No single mechanism can address the challenge of youth unemployment," said Patel.

Government was looking to both short and long term measures, and a package "proportionate to the scale of the problem".

This included the expanded public works programme, the expansion of the national community works programme and the establishment of health, education and "green" youth brigades.

Work seeker and work creator subsidies were also being explored with stakeholders, said Patel.

Unemployment could not be addressed through tax incentives alone, but they could play a role he argued. Patel warned against proposals that would displace older workers.

Definitive position
But the minister's remarks failed to quell calls from opposition benches. for a definitive position on the subsidy.

"We are very disappointed by the ministers response today," said African Christian Democratic Party MP Steve Swart.

"It seems the youth wage subsidy has been shelved in favour of a job seeker's allowance. We expected finality in the Nedlac process, funds have been allocated, the plan should have been implemented in April this year already."

He criticised government for side-lining the national treasury, in its failure to implement the proposal.

Leader of the Democratic Alliance in Parliament, Lindiwe Mazibuko, accused President Jacob Zuma of allowing Cosatu, an "unelected organisation" to block youth wage subsidy even though Parliament had voted for it in the 2011 budget.

When the subsidy was announced, it was expected to cover 423 000 young workers and create an estimated 178 000 new jobs according to National Treasury.

Youth wage subsidy
It would aid employers to offset the risks of hiring young and inexperienced workers and could be administered through the existing pay-as-you-earn tax system operated by Sars.

In response to oral questions put to him in Parliament this week, Motlanthe said the proposed youth wage subsidy was part of government's response to youth unemployment.  

"Government was well aware at the time that it proposed the youth wage subsidy policy that it would have to be referred to Nedlac for discussions so that when it is implemented all social partners will have been consulted and considered the socio-economic impact of this policy," he said.

Government would complete these processes and then make the necessary announcements regarding implementation said Motlanthe.

But Inkatha Freedom Party MP Mario Oriani-Ambrosini said by failing to implement the policy despite the dire state of youth unemployment in South Africa, the government had put the concerns of trade unions above the interests of the country.

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Lynley Donnelly
Lynley Donnelly
Lynley is a senior business reporter at the Mail & Guardian. But she has covered everything from social justice to general news to parliament - with the occasional segue into fashion and arts. She keeps coming to work because she loves stories, especially the kind that help people make sense of their world.

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