Dole system on the cards for SA

Dec 20 2012 10:41
City Press
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A million more to receive grants

Bloemfontein - The ANC is set to approve a comprehensive package of grants for unemployed youth that is estimated to cost R30bn a year.

If approved, they will take to 18 million the number of South Africans who receive state support.

The grants are the opposite of a wage subsidy as the money is paid directly to jobless young people rather than to their employers.

Research by various agencies has found that if you don’t find a first job while young, you are likely to be terminally unemployable.

The first grant proposal is for a R450 per month benefit linked to incentive programmes.

An explainer from the social transformation commission, which sat on Wednesday, reads: “The central policy objective is to protect unemployed youth by preventing them from falling into destitution while promoting education and skills development, and developing labour activation programmes.”

The commission proposes the dole for youth be phased in over seven to 14 years, depending on economic growth.

It is expected to cost 3.5% of gross domestic product and will possibly double the state’s spending on social grants. The commission says this can be sped up, but doing this will have tax implications.

The social assistance packages are estimated to cost R22bn a year; the incentive to learn a skill or attend a programme could cost R2bn a year; and administration costs are likely to be R6bn a year.

Currently, the child support grant costs R35bn a year and youth support will almost double this.

ANC technocrats who drew up the proposals say the economy needs to grow at 3.5% a year to support this. Growth is currently much lower.

The document continues: “The programme will be tax funded, thereby distributing income from wealthier labour participants to those who are not able to access the labour market, thereby reducing inequality.”

The party moots funding from the fiscus.

It says government can implement more quickly if it dumps the reserves of the Unemployment Insurance Fund into a jobs fund to pay for the unemployed youth grants package and to alter the tax rebate systems.

“The economy is growing too slowly to absorb young people, and they are generally not the first to be considered by employers.

"Young people, especially those without matric, have been particularly affected by the downturn in the economy, so the queue of unemployed has (lengthened).”

In addition to the support package for jobless youth, the social transformation commission also debated how to embroider a better human rights culture into the state, especially with regards to sexual orientation rights.

Attacks on gay people have become chronic, with several murders that rocked the nation this year.

Nonracialism also came under scrutiny at the commission, with several delegates noting the ANC has lost its diverse character.

The party is now largely black African; there were only a few delegates who were white, coloured or Indian.

There was also discussion on how employment equity and black economic empowerment policies entrench racial classification.
– Mangaung24 reporter

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mangaung 2012  |  grants



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