DA bemoans hurdles for 'urgent' youth wage bill

DA finance spokesman Tim Harris said the party was concerned that Finance Minister Pravin Gordhan might not succeed in getting the bill onto the statute books. There was no more pressing issue in SA today than youth unemployment and therefore the bill had to be prioritised. "Our unemployed youth cannot wait until after the election‚" he said.

The draft bill faces stiff opposition from the Congress of South African Trade Unions (Cosatu) and its affiliates‚ which address Parliament on Tuesday (15 October) during the public hearings on the proposals being heard by the standing committee on finance.

In addition to the numerous written submissions it has received‚ the committee will hear oral presentations from mainly trade unions and trade union federations.

Among the obstacles highlighted by the DA is the fact that Treasury's underlying policy document of 2010 for a youth wage subsidy has not yet been adopted by the social partners in the National Economic Development and Labour Council (Nedlac).

Bill not a priority

Also the ruling African National Congress (ANC) has not prioritised the bill as one of the seven bills it considers are "necessary" for next year's election. There are 73 bills pending or currently before the National Assembly or the National Council of Provinces.

In terms of the draft bill - released by Treasury last month - a 50% subsidy will be provided for first-time workers between the ages of 19 and 29 earning between R2‚000 and R6‚000 a month. The subsidy will be deducted from a company's total PAYE liability.

Treasury has proposed that the incentive take effect from January and run until the end of 2016 but it would be back-dated to qualifying new employment from 1 October.

The DA has criticised the bill for excluding young workers hired in entry-level jobs in sectors without a minimum wage and for not including existing young workers.

The bill replaces the youth wage subsidy proposal first made by President Jacob Zuma in his opening address to Parliament in 2010‚ a plan that was stalled because of Cosatu's outright rejection of it on the grounds that it risked creating a two-tier labour system and prejudiced older workers.

Employment solutions needed

Harris said the DA would push for the bill to be prioritised at this week's meeting of Parliament's programming committee and would seek an urgent meeting with Nedlac's executive director‚ Alistair Smith‚ to learn about the status of discussions on the proposals and how to move them forward.

The party also plans to question Economic Development Minister Ebrahim Patel and Deputy Minister in the Presidency Obed Bapela on how the proposed bill and its funding fitted in with the Youth Employment Accord signed earlier this year which makes no mention of a youth wage subsidy.

DA economic development spokesman Kenneth Mubu questioned how Treasury could proceed with the Employment Tax Incentive Bill if all constituencies had not approved it as required by the accord.

He highlighted the successes of the Western Cape government's work and skills programme‚ the provincial pilot project for the youth wage subsidy.

"Since 2009 more than 4‚000 young people have been on the Western Cape's programme and about half of them have remained permanently employed since then. So far the province has spent R10m a year on the programme‚ which recently received an additional R67m from the Development Bank of Southern Africa's jobs fund for the next three years," Mubu said.