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Think big about employment, says former Treasury D-DG

The state should not be thinking of job creation initiatives as temporary, says Andrew Donaldson, the former deputy director general of the national Treasury. Picture: Danie Van der Lith

The state should not be thinking of job creation initiatives as temporary, says Andrew Donaldson, the former deputy director general of the national Treasury. Picture: Danie Van der Lith

Published May 26, 2022

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Policy makers need to ‘think bigger’ and be far more ambitious in expanding both public employment programmes and support for private sector job creation, Andrew Donaldson, the former deputy director general of the national Treasury has said this week.

This as South Africa’s record-high unemployment seemed an impenetrable barrier to the country’s post-pandemic economic recovery.

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Donaldson, who is senior research associate at the University of Cape Town’s Southern Africa Labour and Development Research Unit, has shared his insights on the future of employment in South Africa in PSG’s Think Big webinar.

While the government has implemented several measures to overcome the unemployment crisis, policy-makers need to think bigger and be far more ambitious in expanding both public employment programmes and support for private sector job creation if these initiatives are to make a tangible difference, he says.

In reference to initiatives like the Expanded Public Works Programme and Cyril Ramaphosa’s Presidential Employment Stimulus Programme, Donaldson says that the state should not be thinking of job creation initiatives as temporary.

“If they are to make any kind of lasting impact, these programmes need to become permanent elements of our approach to raising living standards and investing in the socio-economic fabric of the country.”

Higher investment and growth are imperative, but job creation has to come from both the public and the private sectors.

“The youth employment incentive is not enough. The tax subsidy should be extended to all labour-intensive industries and low wage earners, not just young first-time work-seekers,” he said.

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He says that to talk to the issue of supporting the South African business environment is to cast the net wide.

“The reality is that ‘business’ is not a homogeneous subject – in South Africa, due to the prevailing inequalities, the topic of ‘business’ extends from well-established commercial enterprises who have thrived for decades, to the emerging township economy, the economies that exist within informal settlements and accessibility issues that affect rural communities. The bottom line is that the South African government needs to invest in cultivating opportunities for work across the entire economy.”

Donaldson argued that employment development programmes needed to become permanent fixtures on the country’s socio-economic landscape.

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The the solution therefore, was to scale-up where institutional capacity was in place.

“We cannot employ temporary solutions to permanent problems,” said Donaldson in reference to the fact that the unemployment crisis has plagued South Africa for decades.

“The President’s Stimulus Programme placed South Africans in schools across the country as assistants and workers in various capacities. Now, we need to take this same approach and apply it to sectors such as the healthcare industry, crime prevention, securities on our rail system and in municipalities. In tandem with these kinds of efforts, we need to keep building our education system to address the skills shortage as a longer term solution. In other words, we need to act with both the short- and long-term in mind – a two-pronged approach to the crisis,” Donaldson said.

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The reality of the South African situation necessitates a ‘back-to-basics’ approach.

“We need to renew our focus on the areas of service delivery and basic infrastructure that we have known how to do for 100 years. Municipal infrastructure, housing, transport and water services don’t need new technologies or innovation, they need investment spending and long-term cost recovery from users. To do this, we need to cement public-private partnerships to inject much-needed funding into these areas. Ultimately, we need to invest in the infrastructure that can support labour-intensive industries.”

Donaldson has told the webinar that the solutions to the unemployment crisis, which is particularly rife amongst the youth of South Africa, will not be found in state policy alone. Instead, it requires a collective effort from the public and private sectors, as well as civil society at large.

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