Budget: Youth fund injection

2011-02-23 12:14

Labour federation Cosatu’s outcry to have the government do away with its plan to allocate funds aimed at encouraging the private sector to employ the youth, appears to have gone unnoticed, as Finance Minister Pravin Gordhan allocated money to the fund.

In his Budget Speech, Gordhan announced that a staggering R5 billion will be channelled towards the Youth Employment Subsidy.

The incentive scheme comes two weeks after the Labour Force Survey for the third quarter last year showed that 42% of people aged between 18 and 30 were unemployed.

“Only 12.5% of South African youth aged below 25 had a job compared to 40% in most emerging economies.

In short, getting that first job after leaving school is the biggest hurdle for young people,” said Gordhan.

“But once one has had that first formal job, chances of getting another are improved.

“Young unemployed people who have some work experience are at least three times more likely to find a job than those who have never worked,” he said.

The subsidy, which Gordhan had promised to launch last March, has been a bone of contention between the ANC’s key alliance partner Cosatu and government.

Cosatu has been contending that the subsidy would encourage companies to concentrate on hiring youth to the detriment of the older workers.

“To take advantage of the subsidy, workers must be aged between 18 and 29 and their wages must be below the personal income tax threshold, which is being raised to R59 750 from R57 000,” said Gordhan.

The subsidy is aimed at covering 423 000 young workers and is projected to create 178 000 new net jobs, each costing R28 000.

“The upper age (29) threshold was chosen because unemployment rates are higher at this age level,” he said.

Gordhan added that the current subsidy will run for three years and will be monitored and reported on every quarter.

“The decision to continue with the subsidy or whether to change its design will depend on the success of the current subsidy to achieve employment targets as well as the costs thereof,” said Gordhan.

The subsidy will be administered by SA Revenue Service.

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.

Inside News24

 
/News

Book flights

Compare, Book, Fly

Traffic Alerts
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.