Zuma's jobs plans in doubt

2011-02-11 08:24

Johannesburg - There were no surprises in President Jacob Zuma State of the Nation address on Thursday but it would be the future detail and delivery that would count, economists said.

"The tricky bit is delivery... this is the difficult part but it is so crucial," said Dennis Dykes, chief economist at Nedbank.

"There was a lot in there which was fairly well known, such as the referrals to the New Growth Path... that it is the year of job creation has been well publicised."

However, it was how these jobs are going to created that was of concern.

"There was not a lot on true facilitation for business to create these jobs. I would have liked to see a much more predictable environment for business to operate in and create the enabling environment for them."

Investec Group Economist, Kgotso Radira, agreed that the address emphasised the important issue of job creation.

"The disadvantage was it lacked the details."

He gave as an example the R20bn Zuma said would be set aside for tax allowances or tax breaks to promote investments, expansions and upgrades in the manufacturing sector.

"Who's going to administer it? SARS or the Treasury? Last year he announced a R1 billion fund to help people access mortgages, who could not go through the formal market, but there has been little success on that.

"We will have to wait for the details and see whether these will work."

He had similar concerns about the New Growth Path.

"What we wanted to know is how in the agricultural sector they are going to create jobs? What is first step? There is focus on the end product, instead of on the starting spade work."

Dykes also had concerns about the tax breaks.

"The better thing is to have an overall enabling environment where business feels confident without being subsidised."

Zuma announced that close to 15 million South Africans were receiving social grants but said they would "be linked to economic activity and community development, to enable short-term beneficiaries to become self-supporting in the long run"

Dykes said this was a "commendable sentiment" that welfare should be linked to seeing people stand on their own feet, but he would like to see the detail.

  • Werner - 2011-02-11 08:48

    It is all electioneering, nothing more.

  • Mikaeel - 2011-02-11 08:54

    Been the same old story for the past 10 years.

  • AndV - 2011-02-11 08:55

    Lowering personal tax substancially will have an increase in demand for goods and services, in return supply will respnd, creating more sustainable jobs. The more jobs tthat are created the more tax will be paid. The government should create an environment for producers/production to grow, creating sustainable jobs. The overburdend tax payer is now just going to subsidise further non sustainable jobs. Why are economists so quiet when they should speak the truth??

  • DeonL - 2011-02-11 09:14

    Social Grants to be linked to economic activity? This will not go well down with lazy people.

  • ian - 2011-02-11 09:14

    There is no detail. They do not know how they are going to achieve it. It is once again all just talk AND the result will be the same. They need to learn that if you want to get a different result, you must do things differntly.

  • willie - 2011-02-11 09:15

    The ruling party is, as usual, long on words and short on action. Talk and more talk and workshopping and so on. There is a dire shortage of knowledge, ability, experience and application. It reminds me too much of the Soviets famous 5 year plans - promises without performance. Result - more frustration and anger. Solution - more promises plus games and handouts. Does this sound familiar?

  • HAB - 2011-02-11 09:18

    Same old story : A lot of talk, no action. Same old story : Calm the masses. New story : Wait for it to backfire......

  • Mart - 2011-02-11 09:21

    1 BIG thing is legislation to compel government and businesses to pay their creditors within lets say 14 days for goods and services which have been received or rendered. An age old problem for small businesses is cash flow which is made worse by being made to wait longer than is decent for their money. Commenrs welcome.

  • Old News - 2011-02-11 09:33

    Same ol' same ol'... ...isn't this the exact same sentiment after every single speech Zuma makes? Beforehand the people ask for specifics, but Zuma remains as vague as possible to avoid stirring up anything with the Alliance partners? The sentiments are always positive and well received, but they mean squat because there is never decisiveness and detail which are required for implementation.

  • steve butcher - 2011-02-11 09:37

    most people are only effective for about 4 hrs in aday taking into account tea smoke lunch etc. labour could be time shared; 100 workers start at 7.00am and finish at 12.00 next shift start at 12.00 until 5.00 you will then employ 100 extra workers for the same dollar and get the tax breaks

  • Richie - 2011-02-11 09:37

    Firstly, permanent lasting jobs cannot be created from thin-air by throwing state funds at it!!! The ONLY way true jobs can be created is by growing the economy. This is a fact, that clearly evades the ANC government. America under FDR Roosevelt understood this and created “semi-permanent” jobs to carry America through after the doldrums of the depression and war. This type of solution they knew was always temporary and eventually drains a economy. What these funds (9 billion) should be used for is EDUCATION. Not only tertiary as a growing economy developing nations economy needs basic skills first. Trade schools, basic IT, tourism, etc. We all cant be doctors and engineers. I had 200 pupils in my university class in my first year and only 16 of us finished our degrees. We lost at least half the students by the first year and another third by the second, only 30 got their diplomas and only sixteen of us got our degrees of which there was 2 black students who scraped by. This means that 170 of students that started the courses, wasted their bursaries and tax money it costs to educate them. The point of my explanation is we are going about this education thing in totally the wrong way. Students have to be screened properly otherwise we are just throwing money into the water. At this stage we are forced to bring down the standards of the tertiary institutions. The Cape Peninsula University of Technology’s quantity surveying department who had a long history of producing some of the finest quantity surveyors in the country who even blew the big universities students out of the water, has recently lost their accreditation and will possible never recover thanks to BEE appointments and the total drop in standards. This I fear is happening all over our institutions. The only worthwhile points Zuma made in his speech were education policies that he stole from the DA and Helen. How very sad that we are missing the opportunity to be led by this amazing woman and struggle hero? My 2c

  • jakkals - 2011-02-11 09:44

    Cosatu is the biggest enemy of job creation in this country.

  • Anonymous - 2011-02-11 09:50

    Job creation, free education for the past two years same chorus. Those who vote for ANC will go to heaven, ofcourse we will go to heaven uneducated.

  • josy - 2011-02-11 09:54

    i also don't know details and steps for such progress but here is my guess:social grants linked to economy - is wellfare being cut or swaped with common consumer products such as maize,chicken and veggies-call it a cmpulsary drive to let grant recievers not to buy liquor with the money, and boom for shop or businesses contracted to supply such products.rebait tax: say maybe co.A may not pay tax to the value of 200mil and use the 200mil to start a new project and create jobs until such companies's rebait reaches 20bil then he will close such-why he is not revealing details i say : he honours more the ability to have than the ability to do.

  • SME - 2011-02-11 09:59

    I really believe that the business environment within which business (small and corporate)operates should be critically examined. It is restrictive (and becoming more so by the day) and simply just not conducive to the employment of labour. Have a look at the revised Company's Act that is currently being shoveled through parliament. And then what about current and planned labour legislation? Not to mention the myriad of administrative and legal compliances that have to be met.

  • Melissa - 2011-02-11 09:59

    How about the government throws a stack of this money at hiring more policemen? Voila - sustainable job creation and crime control tackled in one go. Or maybe that's just too obvious for them....???

  • Sean - 2011-02-11 10:05

    @Richie made quite a good argument till you brought up zille and DumbAsses(DA) education policies to give the have more. LOL they will never be able to rule they will steal more than the ANC and they will be able to hide it. LOL look at the cape town stadium. the ANC budget was 3billion, DA paid almost double where did the other 3billion go... SOME DIRECTORS POCKET, and if you follow it some of it would end up right back at the DA... SO don't give me CRAP. They are all thieves just the one you know about and the other is worst than the devil. PS PEN TECH problems should be blamed on the people did the window dressing, NOT BEE.

  • Pierre - 2011-02-11 10:09

    How can you create jobs by introducing draconican labour legislation? The ANC is so busy cosying up to its alliance partner Cosatu (all of whose members by definition ALREADY have jobs) that they cannot see that the proposed new labour laws will dis-incentivise job creation. That's just plain moronic.

  • Jannie - 2011-02-11 10:14

    Dennis Dykes must be from the FBI to work out "The tricky bit is delivery... this is the difficult part but it is so crucial," said Dennis Dykes, chief economist at Nedbank.

  • Ally - 2011-02-11 10:15

    The issue is the people working for our goverment, they don't do their work as they suppose to. Zuma can say what he likes, but if the his people are doing nothing about what he promises us then nothing will happen. I think goverment need to skill their people and all this things will happen.

  • SEAN-WEAKEST LINK - 2011-02-11 10:17

    I will light a candle for you....

  • Seema Singh - 2011-02-11 10:22

    no change , same old story , maybe if he wrote the speech himself , there could be a possible difference...

  • Burtfred - 2011-02-11 10:24

    Zuma, if you truly want to assist the economy to create employment, there are two changes you have to introduce to your party's policy 1. Scrap BEE - this will slow down or even reverse the emmigration trend of many entrepreneurial job creators. 2. Revise labour laws. Make it easier for employers to dismiss non-performing employees. This will encourage businesses to hire more people.

  • Sarge - 2011-02-11 10:36

    It is no good throwing money at the problem as once the jobs are created will people pitch for work or stay in the workplace and work?Thats the tricky part!

  • Wynbal - 2011-02-11 10:37

    What a waist of "7nde Laan" time !

  • Not Fooled - 2011-02-11 10:39

    Come on guys, don't be so morbid. If you give R9 billion to the ANCYL, they can throw 90 Youth festivals. That'll create jobs in the hospitality, catering and alcohol industries.

  • Petros - 2011-02-11 10:41

    Linking social grants to econonic activity? Good!!! When I was a kid, I herded cattle if I wanted some money for myself - and only those who really wanted to, got educated. Now it is illegal to "gainfully" employ anyone below 15. Instead, the state pays children to have children (called child allowance) rather than providing quality education and encouraging gainful employment. This compounds the problem ... er, sorry, creates a challenge, a circle that will not be broken until freebies are stopped. I agree, we need to look after those who used to fall by the wayside. However, a girl of seventeen with three children when contraceptives are freely available, and dependent on a goverment handout, did not, in my opinion, fall by the wayside. That is just screwing the taxpayer, so to speak.

  • Neil - 2011-02-11 10:44

    It is a waste of time using the IDC to administer any sort of aid to industry. Trying to access any grant or assistance is impossible. They are hopeless.

  • Tembi - 2011-02-11 11:17

    I would like to agree with Mikaeel, it is the same old story for the past 10 years there are no changes. It is from bad to worse,poor people are being descriminated and they are not cared for. If the president can check if his people are working towards the implemantation of what he has said it would be better. I think it is high time that the president must do what he preaches.

  • Dave - 2011-02-11 11:25

    Of course the other R20bn question is where the heck the government is going to find all this money? Out of the big petty cash box in Zuma's office?

  • CEO - 2011-02-11 11:29

    Totally agree with Neil. The IDC is the most useless organisation with such a bad track record of failed investments from Pamodzi Gold to cementitious mine support to biofuels etc, etc. Failure upon failure - run by a bunch of opinionated amateurs

  • tommy - 2011-02-11 11:38

    The man just oozes intelligence! How on earth do primates get empowered to govern such an awesome country? I suppose it has to do with illiteracy - wot.

  • Therk - 2011-02-11 11:59

    Regurgitation indeed.

  • Louis - 2011-02-11 12:00

    Following the normal Government trend... 70% of that money will go for salaries, then to place ads in all the major newspapers and on radio and in The New Age, and don't forget the roadshows.. we will be lucky to see Rm200 of that money.

  • Madelane - 2011-02-11 12:08

    When will this government or any government learn that to create jobs they are required to create a stable safe environment for the people of the country to live in with minimal interference? This means to end the double talk of asking for investment from business while also declaring support for renationalisation....where is their logic. Interesting that MP's in the UK are doing jail time for fiddling their expense accounts while here they walk free and some are still active as MP's....perhaps this explains the level of corruption and stupidity in local and central government!!!

  • BJ - 2011-02-11 12:20

    SO - where do these guys get their model from - where in the world have they succeeded to create more jobs whilst ramping up the labour law environmment to stifle employment and create increasing benefit for a few lucky ones (for the time being) with jobs

  • DW - 2011-02-11 12:38

    @ Sean - 1)The CT stadium cost R4.4b not R6b. 2)Zille publicly complained that the decision in favour of Green Point was taken without "costings and sums" 3)Helen Zille fought against the stadium being built where it was as it would have been a lot cheaper on the Cape Flats, but they were bullied into it by Thabo Mbeki and Sepp Blatter 4)Helen nearly stopped the building of the stadium when the DA won the CT elections - she refused to allow the city to carry more than R500m of the costs - The ANC had already awarded the tender and were furious. 5)I notice you do not discuss the amount by which every single other stadium blew their budget - all in ANC control. I could go on but I think I have made my point

  • Richie @ Shaun - 2011-02-11 13:08

    @Sean, you don’t know what you are talking about regarding the stadium budgets. The same problem occurred on the Durban stadium, Gautrain ( 7 billion to 23 billion), airport (600million to 1.2 billion) etc and other projects all over the country. It was not political it was purely collusion on the part of the contractors and other factors like explosion of steel prices (also possible collusion), bad initial planning and estimating, etc. How do you think construction companies run their funds? These are listed companies with open books. The only money “stolen” is where a BEE contractor (like Malema’s bridges, that washed away) sit on directorships to scrape all the profit off the top with-out adding any real value to the contract. Forcing contractors to push up the profit margin. Corruption is Danny Jordaans brother profiting heavily of services supplied for the world cup without any real tenders going out. I personally know the professionals involved on these projects and there were no “back hander’s”. The Western cape government put by far the most pressure on the contractors and professionals to try and explain why the budgets were destroyed. The Helen Zille comment was slightly tung in cheek, as Zuma stole her polices even using the same names for these policies. You got admit it is slightly laughable.

  • Zion Pay - 2011-02-11 13:43

    I agree with almost all above other than a small point. No special budget was allocated for all those voters who vote ANC. These people will be entitled to tickets to heaven and those don't come free. Where will the money come from. God alone knows.

  • Free - 2011-02-11 13:55

    Be the part of the solution, it is easy to point a finger, any one can do it. Please this is not UK, this SA. Great speeech from Zuma, now the youth of this ountry have hope.

  • DeonL@Free - 2011-02-11 14:09

    Free, we also had high hopes for SA in 1994, Mr Mandela also gave good speaches. In SA you must look after yourselves or be an ANC member for + 20 years.

  • TonyR - 2011-02-11 14:29

    Let's say, just for the sake of fantasy, that the Government creates these 5 million "decent" jobs. My question is, among the ranks of the unemployed, do we have 5 million employable people?

  • @Free - 2011-02-11 14:48

    @Free... free your mind buddy! Is SA supposed to settel for less because its Africa? A president without a plan is useless. He fails to plan, plans to fail!

  • Gen - 2011-02-11 15:07

    Until "job creation" includes paying folk to tidy the litter in the streets and maintaining public areas, what hope do the people of this country have? Surely there is enough work to be done and enough people to do it? This government is still learning to "join the dots" It's going to be a long education!

  • EK IS KEEL VOL - 2011-02-11 15:25

    Ek weet nie wat Zuma beplan nie , maar ek dink hy het lank genoeg stroop om almal se monde gesmeer . Ek werk vir myself . Doen dit al van 1983 af. Het 20 mense in diens. Ek is `n vervaardiger. Ek het nou genoeg gehad. My mense is almal in kennis gestel dat hierdie besigheid sluit op 28/02/2011 . Al hulle geldtjies is uitbetaal en ons maak nou net al die projekte klaar , dan is ek ook klaar . Hoekom sluit ek my besigheid . AL DIE SINNE LODE WETTEN EN WETTE EN WETTE. Labour Law . Vasgestelde minimum lone . Ek kan dubbel soveel mense indiens neem as daar nie so iets so vasgestelde lone was nie.Al die belasting & Heffings wat `n besigheid moet betaal . Voorlopige belasting , Vervaardigins heffing , SABS heffings uif, paye, vervaardigins belasting, kapitaal wins belasting ens ens ens. Dis al waarvoor ons werk . As dit nie belasting is nie dan is daar ook nog al hierdie wette . Dit vat jou `n hele maand om al jou papierwerk op datum te hou en dan moet jy nog almal gelukkig hou . Wel ek is nou klaar. Ek gaan nou ook in die ry staan vir UIF. Ek betaal al van 1983 elke maand getrou. As dit klaar is gaan ek aansoek die vir ongeskiktheidspensioen. Ek gaan my bediende se baba vat en aansoek doen vir `n kindertoelaag.AS EK KLAAR IS MET AL HIERDIE AANSOEKE GAAN EK LUI LEKKER AGTER OOR SIT EN NIKS DOEN NIE . EK KRY DAN 2000.00 PER MAAND OM NIKS TE DOEN NIE. MY HUIS IS KLAAR BETAAL , MY MOTOR IS KLAAR BETAAL EN EK HET NIKS GELD IN DIE BANK NIE , SO EK IS NOU KLAAR !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  • Ozymandios - 2011-02-11 17:17

    As an uneducated layman how can you just create jobs from thin air? Throwing money at that idea is like telling the sea tide to go back and not spalsh on the sea shore. Having a small business, and actually quite successful too till the new labour laws put a dampner on that, I started it by first not just creating jobs but first finding a market I could service. Then when I did that I defined what skills I need to serivce that market. Hired where available and then trained where necessary. You can 'create a job' ( not a career) cleaning the steets but it does not produce a unit of sale that has a gross margin in it, to sustaion and grow a buisness. Having maybe a clean sidewalk suits a person with no skills and an IQ of 4 majored in spelling and full stops. We have more than enough of them in this country and continenet. But such a function is NOT productive to expansion and growth. It seems logical to me ( but them am I logical in my approach to business?) but not one idiot in the ANC think trust has said"Hey lets find sustainable markets first and then create jobs around that concpet." Jawell no fine!

  • James - 2011-02-11 19:29

    Do we have to keep hammering on at the obvious? Take a lesson from the past Zuma.....handouts do not do much other than create layabouts. Get them off their asses into some semblance of labour dignity by stopping the minimum wage crap. You then have them do a few hours a day or whatever and be able to buy KFC or Chicken Licken for the family since that is what is perceived to be the peak of their demands apart from free everything else. My gardener works hard for his money and gets rewarded plus food parcels to take home and no he is not exploited, his wage out to around R500 per week; when he is busy 5 days a week, for 4-6 hours a day at each one of his customer's homes or even more if he fits in 2 per day. I wish that my monthly municipal bill could be that amount. All only for mowing lawns. Put your masses to work, give them a bit of self assurance, it is much easier to clean up the blight of litter we have on our roadsides than pushing a mower around. You are in any event giving everybody free stuff, so start asking for something in return. We all know about extended families living in RDP housing where the combined income could exceed R10 000 per month with no Municipal" overheads, power, water, etc all "stolen" i.e. free.

  • poppy - 2011-02-12 13:57

    South africa might learn from the uproar for democracy from Egypt, and make not mistake, they are an intelligent and well informed nation, whereby some of our population, need to realise that our government is due to join Disney Land..

  • Debbie ann Brain - 2011-02-12 20:50

    Zuma and members of the government are too modest in putting their cogs into the wheels.They should create incentives for universities to invent new ideas for job-creation and enable todays educated students to participate at government level through research and projects designed for our people in S.A.

  • Clement - 2011-02-14 08:04

    Start by observing all interns in all government department and municipality to prove us that the plan will work. If you employ them at least 25% of your promise will be implemented.

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