The DA welcomes National Treasury’s tabling of a Employment Tax Incentive Bill to introduce a Youth Wage Subsidy. We will work in the Standing Committee on Finance in Parliament to make sure a real, strong Youth Wage Subsidy is introduced as soon as possible to help young unemployed people.
It is not clear, however, that Cosatu will allow this bill to be passed given that Minister Patel’s Youth Employment Accord requires that any incentive needs to be "approved by all (Nedlac) constituencies”.
Reports in today’s papers quoting the Cosatu president and spokesperson do not bode well in this regard, especially considering that their organisation has successfully blocked the Youth Wage Subsidy for three and a half years. This cannot continue.
Furthermore, we are disappointed that this new version waters down the benefits of the Youth Wage Subsidy proposed over three years ago:
- It would exclude benefits for many young people hired in entry-level jobs in sectors without minimum wages. This would leave young people who most need the help without benefits;
- The subsidy for existing young workers has been removed;
- This version negatively affects smaller labour intensive businesses with fewer managers who will not be able to claim the full benefit; and
- There is confusion about whether the scheme will apply for 2 or 3 years, with Treasury talking about a new “sunset clause”.
There are also numerous mistakes in the explanatory memorandum and the presentation to Parliament that suggest the bill was released in haste, before a long weekend, to catch Cosatu off guard.
These changes raise questions about whether the tabling of a watered down bill seven months before an election - with talk of a “sunset clause” - might be a cynical election ploy by the ANC to win votes, not create jobs.
We will not allow this to happen and will work in Parliament to introduce a real, strong Youth Wage Subsidy.