President Jacob Zuma addressed two sore points of the government’s policy implementation in his State of the Nation address last night, indicating that it would truck no further opposition to the introduction of a youth employment subsidy and it would work out an appropriate tax regime for the troubled mining industry.
More broadly Finance Minister Pravin Gordhan would commission a study of all tax policies “to make sure we have an appropriate revenue base to support public spending”. It would include an evaluation of the mining royalties regime, although he did not mention the ANC’s support at Mangaung for a tax on superprofits.
He also indicated that the government was looking at incentives for commercial farmers to ensure they were recognised for their input in mentoring new black farmers.
Noting that he had met Anglo American chairman John Parker recently to discuss the planned retrenchment of 14 000 workers at its platinum division, he said the government believed that at a policy level “we have managed to bring about certainty in the mining sector”. The nationalisation issue had also been “laid to rest” at Mangaung.
Two years after the announcement that the government would introduce a youth wage subsidy, Zuma finally stood up to elements in the ruling alliance and announced that a youth job incentive would be implemented.
The subsidy has been bitterly opposed by the Progressive Youth Alliance – the umbrella body of the ANC Youth League, the Young Communist League and student movements, SA Students’ Congress and Congress of SA Students.
Cosatu has also made it known it was concerned that any subsidy to private business might push existing workers out of their jobs, as businesses took in younger and cheaper workers who were subsidised by the state.
In reply to a question from DA parliamentary leader Lindiwe Mazibuko last year, the president said the youth subsidy would go through a process of consultation.
He acknowledged the opposition to the plan, but said “cabinet does not intend to abandon the policy”. The government had undertaken to resolve the concerns raised by its social partners, he said.
He said rising unemployment, “particularly among young people”, had become a focus challenge worldwide.
“In South Africa, the proposed youth employment incentive constitutes just one of many government interventions intended to alleviate youth unemployment over the short term and long term.”
This included measures to boost labour demand and create a conducive environment for investment and growth through the infrastructure build programme and economic support package, and address skills constraints through measures to improve access to, and the quality of, education.
Zuma said there would be a crackdown on government officials who did not pay small businesses within 30 days for work done on state contracts.