Wed May 22 15:02:00 SAST 2013
Wed May 22 15:02:00 SAST 2013

Black Business Council backs youth subsidy

May 25, 2012 | Penwell Dlamini Business Reporter | 186 comments

THE Black Business Council has expressed its support of the proposed youth wage subsidy, calling for conditions to prevent exploitation.

KEY PLAYER: Black Business Council spokesman Andile Zungu says a youth wage subsidy is welcome. Photo: Business Day

 We should explore every possible avenue to fight unemployment, in particular among the youth population in which it is alarming 

The national Treasury proposed that the wages of all workers aged between 18 and 29, who earned less than R60,000 a year, the current tax threshold, be subsidised for a period of two years.

Registered employers would receive the subsidy via credits on their Pay As You Earn accounts. Treasury estimated that the programme would subsidise 423,000 workers. Of these, 245,000 jobs would be created.

The job creation plan proposes that the youth wage subsidy would reduce the financial costs of hiring inexperienced youth and help to make their training more affordable.

Cosatu has rejected the proposal, saying it would enable the private sector to get cheap labour and would result in jobs losses since firms would release older people to hire less expensive labour.

The Black Business Council (BBC) yesterday also endorsed the proposal, but said it should go with certain conditions.

"We should explore every possible avenue to fight unemployment, in particular among the youth population in which it is alarming," BBC spokesman Sandile Zungu said.

"An intervention aimed at encouraging people to employ young people, such as the youth wage subsidy, should be welcomed. We therefore welcome the youth wage subsidy."

But Zungu cautioned, saying: "Many times very smart interventions such as this have unintended consequence. Corporates would look at them as additional sources of revenue that would minimise their costs of employment.

"The focus should be the checks and balances to make sure that the concerns that have been expressed by Cosatu, which are legitimate, are not realised in the scheme."

Comments

Wed May 22 15:02:00 SAST 2013 ::
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May 25, 2012

Mbeva

Let them give it a try,before some dicy political party claims it is their idea
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May 25, 2012

dimpho_4U

all talk and no action..lets wait and see..if these subsidies will benefit the youth,or won't end being another exploitation,_________anyways bright idea
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May 25, 2012

Mananga

Brilliant idea if its going to benefit youth!!!!!!!!!!!
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May 25, 2012

queenzo

i like i like
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May 25, 2012

DA-DBN-GUY

Wow you people sure have very selective memories and ra cist views. Isnt this what the DA took to the street for and were attacked by the law less Cosatu? But now that a bl ack man says the same thing it is a good idea. Fukkk you ppl are pathetic
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May 25, 2012

PleaseGetReal1

Implement it and get it over with, cosatu with their negative stance in holding the country and the youth back..
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May 25, 2012

Dzel

Of course business would support the wage subsidy, it benefits them. This is how each party benefits and why some are against when some are for:

1. The ANC – by creating this subsidy they are hoping to quell youths who have increasingly becoming involved in service delivery protest often complaining of a lack of jobs in their communities. The ANC wants to be seen to tackle the problem and they hope more youths will b employed through the initiative.

2. The DA – if they are seen to be championing the cause then that is political mileage for them and they hope to raise their profile amongst young black voters. It is very difficult for the DA to get votes amongst older voters who experienced the pain of being ruled by a white man. Younger voters are less attached to our past and there less likely to use race as a determining factor when voting.

3. BUSA / BBC – the subsidy means money from government to help reduce costs. If government funds a portion of the wage bill than cost to income ratio improves significantly. Given the absence of stipulation that requires that the cost be used for new jobs only they can simply employ younger workers to replace older ones so in the end all you achieve is changing the demographics of workers without creating new jobs.

In this whole debate one feels like COSATU is the only party that is engaging honestly, all the other parties have a vested interest and are pushing for implementation. The wage subsidy is a good idea in principle but the devil lies in the implementation thereof, how the system is managed is of paramount importance otherwise this has the potential of being an exercise in futility with business the only winners.
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May 25, 2012

DA-DBN-GUY

Dzel

As usual you forget to mention the part about Cosatu missing out on the fees the youth would pay had they been employed otherwise. How about looking at the DA doing their job and championing for the people. They are doing it for the YOUTH. Not the bla ck youth not the w hite youth not the co loured youth or even the in dian youth BUT the YOUTH!!!
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May 25, 2012

PleaseGetReal1

DZEL, you BUSA /BBC is completely flawed, remember this subsidy will work for 6 months per time per person, the older people in business are needed as they are the ones to teach the young ones, any business that get rid of the experienced people will be stupid and there is a law that says you cannot just fire someone without cause and replace them.

This program has been done and tested all over the word with great results, it is currently running in the W.C already on a smaller scale with great success.
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May 25, 2012

dimpho_4U

@DA-DBN-GUY,yes,yes the YOUTH in general .no segregation nor discrimination irrespective :the DA or ANC bla ck,white or Indian etc
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