"Currently what we need to do is to review the budget and do what is called expenditure switching. In other words, we are going to identify expenditures which are not necessarily critical and switch funds from those expenditures into [a] stimulus package," he said.
For instance, Godongwana said, to develop skills there was a need to take money from the skills fund and leverage the private sector in order to train young people.
On Tuesday, the results of the Quarterly Labour Force Survey for the second quarter of 2018 released by Statistics SA indicated that the increase in the unemployment rate is a result of the decline of 90 000 in the number of people in employment.
About 102 000 more people became unemployed between the first and second quarters of 2018.
Godongwana said a stimulus package formed part of responding to the issue of jobs.
"Among other things we have suggested, without undermining fiscal consolidation, clearly we have got to re-look at the expenditure composition of that budget and redirect a number of that towards the areas identified for the stimulus package."
Higher Education and Training Minister Naledi Pandor called for carefully designed programmes to ensure that a range of institutions participate in graduate placements and offer real work experience for young people.