The Production Management Institute (PMI), a subsidiary of JSE-listed Adcorp, said on Monday that government needed to unpack, in simple terms, what it wanted to achieve through its youth employment initiative and to clarify the benefits to labour, business and their consituencies.

PMI sales and strategy director Johan Botha said government needed to make the R5-billion wage subsidy proposed for implementation in April next year, more meaningful to employers.

National Treasury had previously stated that the subsidy would be available to young and less skilled people aged between 18 and 29 years old and earning below the personal income tax threshold.

It further said that the subsidy would only be available for a period of two years at a maximum value of R12 000 a year to contribute to the wages of these employees.

Treasury estimated that the youth employment subsidy would subsidise 423 000 new jobs, with about 178 000 net new jobs being created.

The State had embarked on a strong drive towards employment in South Africa, through different interventions and driven by its New Growth Path (NGP). However, Botha said that while the political will to confront unemployment, which in effect boiled down to youth unemployment, clearly existed, business resources to deal with the country’s social ills were waning, maintaining that the costs and benefits of the employment policy had to made clear.

Botha highlighted a number of issues that needed further clarification, such as savings that would be incurred by businesses employing youths between 18 and 29 years, any additional tax advantages that could be gained through connecting youths to learnerships and further compliance points that could be scored on broad-based black economic-empowerment, employment equity and skills development acts.

“If wages are subsidised through the youth employment subsidy; if learnerships generate both tax breaks and productive staff who can be career-pathed and if legislation promotes youth employment, South Africa can compete in international markets.”

Botha emphasised that the creation of 500 000 additional jobs every year for the next ten years, as stated by the NGP, could not be achieved without meaningful public-private partnerships. “Government simply does not have the national penetration required to impact at a systemic level.”