Cape Town 141010 Finance Minister, Pravin Gordhan briefing parliment on the annal business report.South African Finance Minister Pravin Gordhan said on Thursday the world was heading towards a "currency war" unless developed nations gave ground in negotiations at the Group of 20 (G20). picture : neil baynes

The ANC national conference has defied the sentiments of the Left in the ruling movement by backing Finance Minister Pravin Gordhan’s desire to implement a youth wage subsidy to help ease the paths of millions of unemployed people, especially the young, into formal employment.

The issue has been a running sore in public policy since Gordhan announced a R5 billion budget for the programme in his second budget in 2010.

It was immediately rejected by Cosatu, as potentially undermining existing workers.

If new youth workers were taken up by companies, which received a subsidy from the state to employ them, then older, more experienced workers would face an uncertain future, the union federation argued. Many of them might be replaced by younger workers if the incentives were provided. The transfers would also subsidise employer profits.

But during a report back of the ANC’s economic transformation committee at the party’s Mangaung conference yesterday, Public Enterprises Minister Malusi Gigaba – in his capacity as a national executive member – said the conference had given its blessing to some sort of state incentive to employers to provide work for young people.

“We have been locked for a long time in debates about names, concepts – a youth wage or youth subsidy”, and whether or not to implement such a scheme, Gigaba said.

While the conference did not want the debate to drag on endlessly, he said there was a need “for a social pact” between the government, business and “the youth sector” setting out the interventions needed to tackle youth unemployment.

“The conference is deeply concerned at high levels of youth unemployment in our country [which have] persisted for two decades.”

Significantly, he did not mention the inclusion of the labour constituency or Cosatu in proposed further talks.

Economic transformation committee chairman Enoch Godongwana noted that any changes to the incentivisation of youth labour would be carried out “without undermining the employment conditions of existing employees”.

Another labour issue over which the ANC has come under fire from Cosatu has been its failure to ban labour broking.

Godongwana simply noted that the issue of labour broking was included in changes being made to the labour laws. Under these changes, labour broking is regulated but not banned.

Conference delegates agreed that there was a need “to create incentives” to absorb unemployed youth, Gigaba said.

In addition, the conference called for a close look into the “mechanisms available” for learnerships, which Gigaba acknowledged had “not worked as well as we would have wanted them to”.

Commenting on Cosatu’s threat of industrial action if its demands were not met at the conference, Gigaba emphasised that “this is an ANC conference… we are adopting ANC resolutions. The three partners in the alliance are independent of each other. There will be areas where our policy decisions are not the same.”

The youth wage subsidy has been held up in Nedlac, the negotiating forum for the government, business and labour.