Gordhan gets going on jobs

Finance Minister Pravin Gordhan has set President Jacob Zuma's grand jobs vision in motion with a R150-billion package to stimulate millions of jobs.

Among initiatives announced in his Budget speech were a R5-billion youth wage-subsidy scheme to encourage hiring of young people.

Gordhan provided more detail on a R9-billion jobs fund and R20-billion in tax incentives for manufacturers announced by Zuma during his state of the nation address two weeks ago.

Another R73-billion goes to the expanded public works programme aimed at creating 4million short-term jobs within five years.

The national skills fund and sector education training authorities (Setas) have been granted a combined R28.9-billion over three years to finance skills training to get more people into skilled jobs.

Government's New Growth Path document has set a target of creating 5million jobs over the next five years.

According to the plan, infrastructure development and housing could create 250000 jobs a year until 2015, manufacturing is expected to create 350000 new jobs by 2020 and tourism is expected to grow its employment levels by 225000 in the next four years.

The government is also pumping R73-billion in the next three years into the expanded public works programme, which in this financial year is expected to create 800000 short-term jobs, lasting an average of 104 days.

The controversial youth employment subsidy - to be administered by the SA Revenue Service - will mean firms that employ inexperienced people aged 18 to 29 could get tax breaks to cover their wage bills.

"The subsidy will lower the relative cost of labour for business without affecting a worker's wages. The experience and training gained during the period of subsidised work will improve longer-term career prospects," the Treasury said.

But labour unions warn that the scheme could open younger workers to insecure jobs and lower wages by companies rushing to cash in on the subsidy.

The Receiver, which reconciles records of employers and employees twice a year, will run the subsidy scheme and monitor abuse by corroborating information on employers and employees claiming the subsidy.

Gordhan said that the scheme was one of the many proposals to create jobs. A document on how it worked would be taken to the National Economic Development and Labour Council tomorrow where unions, civil society, government and business would discuss it in detail.

Asked if the government did not jump the gun by outlining details on the youth subsidy before consulting its social partners at Nedlac, Gordhan said the document was not final but was aimed at encouraging debate.

"There should be 20 papers, with 20 different ideas all of which say what are the most innovate, creative and energetic things we can do to give youth jobs and training and work opportunities in South Africa," he said.

Though the subsidy will benefit about 423000 young workers, only 178000 new jobs are expected to be created through this initiative as the remaining 245000 are thought to already be employed in various industries around the country.