Govt ditches youth wage plan

Cape Town - It appears that government’s proposed wage subsidy to tackle youth unemployment has been taken off the table because of pressure from Cosatu.

On Thursday, in response to presidential questions regarding the wage subsidy announced in Finance Minister Pravin Gordhan’s February budget, President Jacob Zuma reduced the issue to a conceptual “debate”.

The DA had wanted to know what had happened to this plan.

Zuma said it was an issue that should be debated to see whether everybody agreed with the proposed intervention. If government had simply gone ahead, he said, the DA would have accused it of dictatorship.

In April Cosatu met the ANC leaders to express its opposition to a wage subsidy. The union feared that such a system would lead to further inequalities.

Sake24.com understands that the battle against youth unemployment is the cornerstone of South Africa's new growth-path document drawn up by former trade union leader and Economic Development Minister Ebrahim Patel.

According to the source, who wishes to remain anonymous and who has already seen the draft document, two schemes have been proposed to counter youth unemployment. One would operate like the former apprenticeships – by means of a partnership between the private sector and the state.

The other system would be completely controlled by the state. It would involve the state placing unemployed youths in vacant government posts for brief periods.

Sake24’s sources says the system would put pressure on government coffers and would not provide young workers with any real training.

In his budget Gordhan had said that the plan was to qualify 1.3m youths for the wage subsidy by 2013.

- Sake24.com

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