Public hearings into the controversial tax incentive scheme which urges employers to create jobs for young people, popularly dubbed the youth wage subsidy, start today before the parliamentary finance committee.
The political battle lines have been drawn over the Employment Tax Incentive Bill amid pressure to do its work in time so the incentive could be implemented as scheduled from January 1.
While the DA has adopted a youth wage subsidy as one of its political battles, Cosatu is opposed to such a scheme over concerns older workers would be replaced with youngsters.
And the ANC, at its Mangaung national conference, said it favoured a work seekers grant.
Kicking off the parliamentary hearings today is metalworkers’ union Numsa, which is expected to argue against the bill it describes as little more than a “hand-out to employers”, according to the union’s legal services head Norma Craven.
“To suggest that a subsidy is going to solve that problem (of high youth unemployment) is laughable. What kind of jobs will be created? We are talking here about very low paid general work-type jobs… The unemployment problem requires skills, and that means we need education sorted out and skills development.”
Cautioning against the finance minister’s powers to institute the tax incentive in any area and any industry, Craven told the Cape Argus a World Bank development report indicated such a subsidy had not created jobs where it was implemented.
It is estimated 178 000 new jobs could be created through the tax incentive for workers aged between 19 and 29 earning R6 000 a month or less. The tax incentive would apply for two years, and could also apply to special economic zones.
Yesterday, DA MP and finance spokesman Tim Harris – despite some concerns over the bill – said the youth wage subsidy was “a no-brainer” and the DA would work to ensure it was implemented.
The DA said it would plug its Western Cape pilot scheme. With a budget of R10 million it has created 4 000 jobs for young workers, half of whom gained permanent employment.
Finance committee chairman Thaba Mufamadi told the Cape Argus: “We will run with it (the bill). What is important is what is good for South Africa and the unemployed – not political posturing. Political posturing will not take South Africa anywhere.”
Almost three out of four people aged under 35 are unemployed. More than three million South Africans aged between 18 and 24, who should be in work or further eduction, are not, according to statistics.
Finance Minister Pravin Gordhan will table the final version of the draft law after his medium-term budget policy statement, or mini-budget, next Thursday. - The Argus