‘Don’t politicise youth subsidy’
Loss of experienced workers a worry
Donwald Pressly FINANCE Minister Pravin Gordhan called on opposition parties not to politicise the issue of a youth wage subsidy and score political points while the business, labour and government chambers of Nedlac (the National Economic Development and Labour Council) were considering the matter.
He was responding to Tim Harris, the DA’S shadow finance minister, who asked the first question during a postBudget discussion in the National Assembly finance portfolio committee yesterday.
Harris praised Gordhan for “drawing a rabbit out of the hat” – including reporting the fiscal deficit lower than expected – but said that he had in a previous Budget indicated that the youth wage subsidy – envisaged as a subsidy to companies which employed young people – was supposed to have been implemented from April 1 this year, with a budget of R5 billion in the fiscal kitty.
Harris said the beauty of the policy document on the wage subsidy was carefully crafted to ensure that it “helped to promote youth employment without amending conditions for employment”. But it appeared now to be dead in the water.
Gordhan, who welcomed the positive remarks about the lower-than-expected deficit, said the government had, indeed, set aside the money for the youth jobs promotion plan.
“We have had discussions in government. We took the process to Nedlac,” said Gordhan. Some of the primary concerns that were raised by “some” in the labour constituency was that businesses “could employ younger inexperienced workers and displace older workers”. He referred to this as a genuine concern.
He said discussions were ongoing on how to resolve this problem, but he appealed for the matter not to be politicised.
“I would sincerely recommend that we don’t turn this into a political football,” noting that youth unemployment was a serious national challenge – with an estimated 40 percent of young people unemployed.
It was not clear whether he was talking to the DA, which backs the youth subsidy system or to Cosatu, which vehemently opposes it, but he said that the matter should not turn into “a point-scoring exercise”.
“Even among us as politicians we can reach agreement on certain things or forever fight because we want to demonstrate some superiority or other.” He said the time for talking about the matter was reaching a cut-off point. “The talking has to stop and the doing has to start.”
On financing of the infrastructure build programme, opposition MP David Ross asked whether capital spending costs should be absorbed by the consumer – citing the massive increases in electricity costs charged by Eskom because of its massive build programme – or were there other ways of skinning the cat.
Harris asked whether enough was being done to spur economic growth, the best way of ensuring job creation and a bigger tax cake.
Gordhan said his Budget had focused on the vision for the economy by 2030, emphasising the need to lower the cost of doing business, boosting agriculture, mining employment and access to the employment market by the young.
He also said there needed to be an end to cronyism “and deployment of friends and family” in the government as a way to build an efficient state.
In answering Ross’s question, he related the matter of who pays for the cost of infrastructure to the highway building programme in Gauteng, where Cosatu and others had voiced opposition to e-tolling.
He said the government had listened “carefully” to the public in Gauteng and had asked itself how best it could go halfway to meet the demands.
“There was no way we were going to find R20bn (the project debt), but we found R5.8bn,” he said, noting that this had brought the toll rates down.
He implied that a compromise on capital costs needed to be reached on other infrastructure projects.