Youth wage subsidy still-born - Zille

2010-07-11 19:14

Cape Town - Government's proposed wage subsidy for young, first-time job-seekers appears to be still-born because of politicking within the ruling tripartite alliance, Democratic Alliance leader Helen Zille said on Sunday.

Writing in her weekly newsletter, Zille said it was heartening to hear President Jacob Zuma announce in his State of the Nation address earlier this year that government would be implementing such a wage subsidy, "despite protestations from the ANC's ally, the Congress of SA Trade Unions".

"Six months on, there is every indication that the wage subsidy, which Finance Minister Pravin Gordhan estimates would create 500 000 new youth jobs by 2013, is still-born because of politicking within the tripartite alliance," she said.

"This is a great tragedy, not only for the 3.1 million unemployed young South Africans, but for everybody who is serious about reducing poverty and inequality.

"South Africa can only succeed if we retain and grow our pool of skills and capital.

Tax base

"Without a strong (and growing) tax base, no developing country can survive, particularly one with an extensive welfare system such as ours."

According to a recent study by the SA Institute of Race Relations, there were 12.3 million social grant recipients in South Africa supported by 5.3 million individual income taxpayers.

Zille said reversing the present dependency ratio should be the goal of every policy-maker.

"If we are to survive and prosper, we must increase the number of taxpayers relative to grant recipients through a single-minded approach to job creation.

"I agree with those who argue that this must be our over-riding national priority, and that all policy choices must be measured against it.

"This is the only way, over time, that we will narrow the wealth gap," she said.

"Reducing poverty and inequality in South Africa will take a concerted effort from all of us - rich and poor, black and white.

"Indeed, it is in everybody's interest that we do so. But it won't happen if we treat economic opportunities as a zero-sum game or if we continue to allow vested political interests to maintain the status quo.

"It's time for a fresh approach to growing the economy and shrinking the wealth gap," Zille said.