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Cape Town -The ANC is confident the draft Employment Tax Incentive Bill will become law before January next year, chief whip Stone Sizani said on Tuesday.
The ruling party's statement comes after its ally Cosatu called for the immediate withdrawal of the bill, citing potential abuse by employers.
The bill makes provision for companies to receive incentives for hiring younger workers.
“We have no doubt that the incentive will encourage the private sector, which employs over 70 per cent of those in formal employment, to expand its intake of young workers,” Sizani said in a statement.
“This will contribute towards the reduction of unemployment in general.”
On Cosatu's concerns that the move would pave the way for employers to replace existing workers with subsidised workers, the ANC said safeguards had been built into the bill.
“The bill makes provision for various penalties aimed at deterring employers from abusing or transgressing the provisions of this legislation,” the chief whip said.
“For instance, any employer found to have displaced an employee in order to further access the tax incentive will be disqualified from receiving the incentive.”
The African National Congress appeared to be on a collision course with the Congress of SA Trade Unions, which said it was “committed to resisting the passing and implementation of the bill”.
In his statement Sizani said: “We appeal to all stakeholders to support this progressive initiative, which we are confident Parliament will pass to ensure it comes into operation from January 2014.”
The Democratic Alliance said it remained baffled by Cosatu's opposition to the bill.
“Cosatu tried to justify its opposition on the grounds that subsidised young workers will replace unsubsidised older workers. This simply will not happen... the bill introduces specific measures to prevent it,” DA MP Tim Harris said.
Trade union federation Fedusa is also opposed to the bill.
Federation of Unions of SA general secretary Dennis George said Fedusa was concerned about several aspects of the bill, including deadweight loss, displacement, and substitution.
“Deadweight loss occurs when a company would have employed a person anyway, without the subsidy. This means that the subsidy actually adds no value,” he said in a statement.
“Substitution and displacement on the other hand, happen when a regular worker is dismissed and replaced with a subsidised worker.”