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Mantashe: Youth subsidy debate sterile

May 21 2012 17:12 Sapa

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Johannesburg - The debate between Cosatu and the DA over a youth wage subsidy is "sterile" because of its preoccupation with the terms of a subsidy, ANC secretary general Gwede Mantashe said on Monday.

"We are not just looking at just the wage subsidy, we are looking at using the money to help young people acquire better skills and enter the labour market," he told reporters in Johannesburg.

Apprenticeship schools were half-empty, he said.

Government departments had commented that the young intern engineers they had hired had moved on to other companies.

They had also seen how employees could be sent by their companies for subsidised training in a specific field, and came out as artisans.

Mantashe said the debate had shifted from employing more people to decent work, and that had killed the issue.

"We must ensure that the budget is used to ensure the acceleration of the growth of young people into the labour market," he said.

Last week, the Democratic Alliance marched to Congress of SA Trade Unions headquarters, in Johannesburg, to call on the trade union federation to support a youth subsidy as a way of alleviating youth unemployment.

President Jacob Zuma announced the R5bn subsidy in Parliament in February 2010.

Cosatu believes a subsidy suggests that high wages and restrictive labour laws are behind youth unemployment, when improving basic education, skills development, the "green economy" and local procurement will help more.

It believes the subsidy will encourage companies to hire cheap young labour just for the subsidy, and will retrench older workers.

Last week, Zuma said the issue was still being discussed at the National Economic Development and Labour Council and final recommendations would be made to Cabinet.

The ANC said government departments should urgently use budgets meant for absorbing youth into the labour market.

It has also decided that an intra-alliance discussion on youth unemployment is urgent.

According to the DA's discussion document on the subject, the Treasury's proposal was that an employer-side subsidy would be available for new hires aged 18 to 29 for two years, and for existing workers aged 18 to 24 years for one year.

Companies would access a cash reimbursement through the SA Revenue Service payroll tax platform and target workers below the income tax threshold.

Legislative changes would be needed, but it was not yet known what needed to be changed.

The Treasury had also proposed additional measures, such as training incentives and job search assistance, to support the subsidy.

cosatu  |  da  |  anc  |  youth wage subsidy
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