Johannebsurg - The ANC appears to have completely dumped the Youth Wage Subsidy and is now sticking with the Employment Tax Incentive Scheme to ramp up job creation for the youth.
However, a study is under way to determine the effectiveness of the tax incentive scheme in creating jobs for the youth.
In its discussion documents released last week for the national general council (NGC) in October, the ANC hasn’t mentioned the youth wage subsidy, but talks, instead, about other intervention measures.
In recent discussions and debates in Parliament, ministers have been asked about the impact of the Employment Tax Incentive Scheme, with opposition parties arguing a Youth Wage Subsidy would have had a better effect than the options being explored.
One minister said the R5 billion that the youth wage subsidy requires simply isn’t available.
The new scheme has, they contend, created 275 000 jobs since its launch in January last year.
Critics still argue that the youth wage subsidy would have been more effective than the current programme. In the discussion documents, the ANC says it will create job intervention programmes for the youth and women.
The ANC is worried about the growing number of unemployed young people and it wants more interventional measures.
“Youth aged 15-24 years account for almost 20 percent of the country’s population, while those aged 15-34 years account for 37 percent,” says the discussion document.
“The majority of the youth are poor, with more than half of all 18 to 24-year-olds living under the lower-bound poverty line of R604 a month in 2011.
“More than two-thirds live under the higher-bound poverty line of R1 113 a month – about half of whom are unemployed and about two thirds are inactive,” says the document.
“Employment projections show that, even if average annual growth were to rise to 5 percent, unemployment among 15 to 24-year-olds would be about 44 percent and 31 percent by 2030 respectively, in the absence of special other interventions,” it adds.
Under the section on economic transformation, the ANC says a lot of interventions were required to get the youth out of poverty.
While it lists employment programmes for the youth, the ANC does not touch on significant new programmes.
It lists setting aside jobs for the youth and women, including “strengthening the placement sector to prepare matrics and place them in jobs”, and “incentives to reduce the initial cost of hiring new entrants”.
During a debate in Parliament recently, Deputy Minister in the Presidency Buti Manamela was asked whether the government has completely dumped the youth wage subsidy.
He responded that there was no silver bullet when it came to solving the jobs crisis facing the youth.
He went on to say that the government was going to undertake a comprehensive study to assess the impact of the employment tax incentive scheme.
The study will be conducted by the Treasury, the National Youth Development Agency and the Department of Economic Development.
The minister went on to stress that the tax incentive scheme would be refined further, based upon the outcomes achieved, to get more young people participating in the labour market.
Political Bureau