Mixed reaction on youth subsidy

A R5-billion youth wage subsidy aimed at creating 423000 jobs for young people has had a mixed reception from youth groups.

The scheme, to be rolled in the next three years, was announced by Finance Minister Pravin Gordhan in his Budget speech.

The aim is to give companies an incentive to employ inexperience young people age 18 to 29.

The ANC Youth Leagues has slammed the idea, saying the R5-billion should have been directed towards youth development initiatives and not big business.

Andile Lungisa, deputy youth league president and chairman of the National Youth Development Agency, said he would challenge the subsidy when it was discussed in detail at National Economic Development and Labour Council tomorrow.

"It's not the way to go, it's not going to assist anybody. If it's taken on youth projects it will assist young people to start their own community projects, it will assist young people to start their own business where they will be given start-up capital", he said.

But DA Youth leader Makashule Gana supported the youth wage subsidy, saying his party had been selling the idea to the government for a decade.

"A wage-subsidy programme will also reduce the cost of production, which boosts our performance on export markets, and in so far as as it generates wage income, it creates demand-side stimulus in the economy," said Gana.

Young Communist League general secretary Buti Manamela hailed the Budget as one with a bias towards the youth as it set aside than R100-billion to stimulate job creation.

"It's a youth-centred Budget, it's dedicated towards what the needs and aspirations of the youth are. More money allocated towards education, close to R100-billion to job creation and entrepreneurship development money towards [the National Youth Development Agency] whose main preoccupation should be about job creation. Healthcare improvement is about young people benefiting.

ACDP MP Steve Swart said his party "broadly supported the budget", with economic growth and revenue figures adjusted upwards, resulting in no tax-rate increases.

COPE MP Nic Koornhof said his party was also behind the wage subsidy.

SACP spokesman Malesala Maleka said Gordhan's Budget signalled a focus on the youth and unemployment, but his party remained worried that employers could abuse the wage subsidy.

"A wage subsidy can be subject to abuse by the employers and if we are to ever implement such measures we must have developed a system that cannot be abused by profit chasing capitalists.

CEO of Business Unity South Africa Jerry Vilakazi, said it was premature to shoot down the youth wage subsidy.

"Perhaps what we need to do as we engage at Nedlac is to say, let us have a pilot on this, let us see the extent to which young people are absorbed and retained in the labour market, I think we should give it a space," he said.