State moots fund to tackle jobs crisis

2011-02-08 16:04

Johannesburg - South Africa intends to create a R10bn fund to tackle massive unemployment, the ANC's secretary general Gwede Mantashe told Reuters on Tuesday.

The R10bn job fund will be a partnership between the government and the private sector, he said.

Initially the government will lay out the capital, and businesses who participate by hiring new workers or providing training schemes were likely to benefit from incentives such as tax breaks.

Job creation was expected to be the major theme of President Jacob Zuma's state of the nation address on Thursday, when he outlines his government's priorities.

"We must not only do something when the anger and humiliation of those unemployed turn into uprisings when they begin to revolt," Mantashe said.

The fund will be used to help Zuma's already announced plan to create five million jobs in 10 sectors, although some analysts say the focus on government-directed employment growth should be shifted to the private sector, with laws that make it easier and less costly for firms to hire workers.

Unemployment fell to 24% in the fourth quarter of 2010 from 25.3% in the third quarter, but more than half of employable youth under 24 were without work.

High unemployment levels are partially attributed to tough labour laws, which make it relatively expensive and unattractive for firms to hire new workers.

However, calls to amend the labour laws have traditionally raised tensions between Zuma's ANC and the labour federation Cosatu that supported his rise to power.

"He (Zuma) needs to make it easier and cheaper to do business and loosen labour market tension if there are going to be any strides towards growing employment," independent political analyst Nic Borain said.

Mantashe said the fund was intended to address skills shortages and to provide real benefits for the unemployed, and to lessen the impact of the poverty many of them endure.

The government has proposed sweeping changes to labour laws intended to appease Cosatu by increasing job security for temporary workers, but economists expect the shake-up will make unemployment worse and ramp up costs for employers.

The ANC and Cosatu are at odds over the ruling party dropping the adjective "decent" to describe the types of jobs it plans to create. Mantashe said there was nothing as "indecent" as being unemployed.

Apart from the job fund, Zuma's government was also contemplating a youth wage subsidy for entry level workers. This is likely to appease business, which was unhappy with paying high start-up wages without knowing an employee's level of skill.

  • Juan - 2011-02-08 16:36

    Only R10 billion to create jobs? But the spent over 50 billion on a silly world cup that ran at a dead loss with fafa taking all the profit? And they spent even more than that on the arms deal. This is just proof that the anc government does not care about the unemployed and poor. Fortunately for the anc, the masses will never consider these numbers and realise that their government does not give a **** about them. Such a waste.

  • gee dee - 2011-02-08 16:47

    Only for black people again I suppose?! Small business should be allowed more breaks and skin color should play less of a factor in this country. That's if you want business free to do what it does best: create jobs. Forget about nationalising mines. Focus on fixing potholes, policing etc, loosen the constraning laws around businessand let business take care of business. Business likes the color of money- nothing else. It's time to be as color blind as business if you want this country to grow. Or we entrepeneurs will leave. We've had it with silly racist laws and tax money squandered.

  • DeePee - 2011-02-08 16:53

    Drop the ridiculous labour laws and start creating a prosperous country for ALL its poeple, not only for a few union bosses.

  • ja swaar - 2011-02-08 17:01

    That is what they will say now with the elections on the way.

  • Rick - 2011-02-08 17:26

    Where are they going to find jobs, when foreign investment is bypassing us because of our stupid labour laws. Who will want to over staff their business by employing them train them and get stuck with them when they don't need them after the Govt has taxed us to death with no disposable income to grow the economy. Really does not make long term sense. It is time the unions and govt came to there senses and scrapped most of the labour laws so making the employee respnsable for his action and destiny instead of creating a nanny state, that we alrady have. West african countries and Asia are sourcing our foreign investment.Half of the 10bn will be used for parties by Govt officials anyway.

  • David - 2011-02-08 17:30

    well, the hikes in electricity prices and the new toll gates will create job losses in the business sector. Please Mr president, explian to me how you are going to tackle job creation against job losses due to price hikes

  • cvdm - 2011-02-08 17:39

    What should happen is a 35% reduction on Personal Tax (See that we are now directly funding Escom, plastic bages, road maintenace, buying school books, have hospital plans,pay additional property tax, etc.) and have to get paid Interest at money market rates for Paye paid inadvance to SARS (It is actually only payable at the end of the SARS Fiscal Year) and allowed for deducting any "Input Cost" towards earning a salary, education, training, toll gate fees, transport cost and expenses occured on earning a living, i.e; 14% VAT on food and clothes to wear, etc.

  • Andy - 2011-02-08 18:05

    Just some retoric before the election to go with the T shirts that will be given away by the ANC. T shirts that are made in China because the labour laws destroyed the viability of making clothing locally and providing jobs. It is just another slush fund that will be plundered by the corrupt few and financed by the working few.

  • Sallie - 2011-02-08 18:12

    To the ANC's secretary general Gwede Mantashe! What the "frikkadel" happened to the SETA's???????????????. They have more than enough in their account!!! Another foolish way to channel money to the enriched BEE.

  • Grant - 2011-02-08 18:19

    The only way to promote job growth is through private sector growth. No amount of money a goverment spends on stimulus will create any jobs. Look at the US. SA needs to catch a wake up and make it attractive for foreign investment. Decrease corporate tax rates and change labor laws so that employers are not held hostage by their employees. Since when is it a right to have a job? It is a priveledge. Employers should have the right to hire and fire who they want when they want and should not be held responsible for an employees lack of effort. Current labor laws breed lazy workers because they can never be fired, yet can demand more pay.

  • Cire - 2011-02-08 18:19

    First of all, governements consume money - they don't create 'sustainable' jobs. Better to de-regulate the labour market and reduce taxes; it worked everywhere else and it would work here too. The ANC dfoesn't want to limit its ability to buy votes through social welfare (of which it pockets 90% in salaries for the welafre bureaucracy). In fact, given the track record of the ANC, it will proabaly steal most of the remaining 10% in any case.

  • eh - 2011-02-08 18:21

    So the taxpayer again is going to pay for a wasteful, ineffective fund (see UIF fund, see Skills Development Fund etc...) which is supposed to "create" jobs. Neither the ANC nor Cosatu can create jobs. This is the work of intelligent, resourceful entrepeneurs. Gov should rather keep their grubby paws out of business....

  • George - 2011-02-08 18:36


  • corro51 - 2011-02-08 19:16

    I have a better idea. Let's organise a Youth Congress, and discuss how we are going to tackle this issue. Only ZAR 10m, cheap at half the price.

  • Mosso - 2011-02-08 20:12

    @Deepee,,Drop the labour law???Dude are u smoking pot??? We might as well drop any other law in SA. Labour law it's there to keep arrogant and stupid employers at bay. The problem with people like you its that you think labour law was implemented for blacks but you would be suprised if you give yourself time and visit the CCMA offices for a day or two.

  • Mosso - 2011-02-08 20:19

    @gee dee, Leave!!!! These labour laws applies to every1. Don't flirt yourself and think that black businesses are free from labour laws. As much as we all know that if you exceed the speed limit you will be charged for that, the same goes for labour law, if you run a chinese factory then your ass will be burnt.

  • Bling girl - 2011-02-08 21:16

    There has been an unemployment problem for too long now. We all know this is Part of the macro enviroment problems that are hard to tackle but I think we should stop talking and start doing.To be honest most south africans are lazy and love money but to decrease problems such as povery the government cant ignore the situation...

  • Koringriek - 2011-02-09 08:55

    10 billion will give 500000 people R1666 p/m for 1 year.

  • Not Fooled - 2011-02-09 10:48

    I sense a wonderful opportunity to fool the electorate and then engage in a spot of corruption before throwing a party and going to Heaven.

  • Mosso - 2011-02-09 19:31

    @ every1,,,ask urselves this question..."why was the labour law implemented in the first place?" The labour law is not contributing to unemployement,,,whoever came up with that is smoking pot. Go do a proper investigation before blasting your mouth off with false information. Let me fill you in,,,,most referred disputes at the ccma is those of unfair dismissal, in most of the time you find that the employer failed to follow the proper channel of addressing issues within the company. Companies have policies but they can't apply whats on the paper properly. Theres companies that can assist employers with incompetent IR Managers on labour law. EDUCATE YOURSELVES AND STOP CRYING ABOUT THE LABOUR LAW BEING TOUGH.

  • Boesman Du Toit - 2011-02-10 06:21

    Much prayer and honesty,and vote and encourage others to vote. God have mercy on South Africa,these people who kill the farmers are not humans they are savages prompted by the secret agenda spilled over from the heart of and evil Murdering Devil"Kill the Boer" God will deal with him he has not long to reign...

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