Youth reject wage subsidy

Deputy Minister in the Presidency Buti Manamela addressed the Progressive Youth Alliance on the draft National Youth Policy 2020. This is part of the ongoing consultations with youth formations, to ensure that the policy speaks to the needs, interests and aspirations of young people held at Ouradsdal, Pretoria, 04/02/2015. Siyasanga Mbambani/DoC.

Deputy Minister in the Presidency Buti Manamela addressed the Progressive Youth Alliance on the draft National Youth Policy 2020. This is part of the ongoing consultations with youth formations, to ensure that the policy speaks to the needs, interests and aspirations of young people held at Ouradsdal, Pretoria, 04/02/2015. Siyasanga Mbambani/DoC.

Published Mar 30, 2015

Share

Johannesburg - The government is set to investigate the impact of the employment tax incentive, otherwise known as the youth wage subsidy, after it was overwhelmingly rejected by most young people during the consultative process on the National Youth Policy.

According to the revised draft policy presented at the two-day consultative conference in Joburg on Sunday, most youth were not in favour of the government paying companies to employ young people, as envisaged in the Employment Tax Incentive Act.

Research would be conducted to assess the impact of the wage subsidy, which is currently being implemented by the government.

According to the act, employers receive a tax incentive for employing young people for a maximum of two years.

The youth wage subsidy has been a point of contention among various interest groups, including labour, which is vehemently opposed to the subsidy on the grounds that it puts the jobs of older workers in jeopardy.

“An impact study will be undertaken by the National Treasury, the National Youth Development Agency and the Department of Economic Development to examine the effectiveness of the employment tax incentive in stimulating job creation for new entrants in the labour market. The scheme should then be refined on the basis of the outcome of the impact study,” the revised draft policy states.

The youth wage subsidy was adopted by the government and implemented since January 2014.

The subsidy was rejected in favour of the Youth Employment Accord, which committed to a R2.7 billion kitty to be disbursed to the Independent Development Corporation and the Small Enterprise Finance Agency to support youth entrepreneurship

SA Youth Council president Thulani Tshefuta said at the conference; “We rejected the youth wage subsidy at Nedlac (National Economic Development and Labour Council) in favour of the Youth Employment Accord because the youth wage subsidy does not create any practical new jobs. One of its failures is that it subsidises the private company to absorb young people without any obligation to train and retain any percentage of those young people as permanent employees. It does not even impose penalties on companies that do not provide these young people with proper skills.”

Hundreds of delegates are attending the two-day consultative conference on the youth policy, but it nearly descended into chaos as they demanded changes to the programme.

Deputy Minister in the Presidency Buti Manamela, who is hosting the conference, was forced to change the programme.

Panellists lined up for discussions had to walk off the stage and allow officials from the Department of Planning, Monitoring and Evaluation to present submissions made by young people from various provinces, which was not part of the initial programme.

The draft National Youth Policy was released for public comment in January, and is supposed to be adopted by the cabinet and inform the government’s Integrated Youth Development Strategy.

[email protected]

The Star

Related Topics: