Cosatu to go to court over youth subsidy

2014-01-03 00:00

COSATU wants to go to court to stop the controversial youth wage subsidy.

The trade federation spokesperson Patrick Craven said Cosatu is currently consulting lawyers to contest the Employment Tax Incentive Act in court.

The act will give employers tax rebates if they employ people between the ages of 19 and 29, but Cosatu says this youth subsidy will cause experienced, more expensive workers to lose their jobs.

Craven said the federation — which has been a staunch opponent of the act and managed to delay its implementation for almost three years — was angry at how the act had been steamrollered through without consultation.

Finance Minister Pravin Gordhan announced the act in 2011 and said government had budgeted R5 billion towards subsidising employers who take on young people.

Craven said Cosatu would challenge the legality of the act, because it had not been referred to the National Economic Development and Labour Council (Nedlac).

He said the law did not hold a solution for South Africa’s high percentage of jobless youth.

The DA had supported the youth subsidy from the start and the party’s supporters had in 2012 even bled for the cause after stones were thrown in a violent clash with Cosatu supporters during a DA march in Johannesburg.

Tim Harris, DA MP and shadow minister of finance, said the party still supports the act and was glad that young people now stand a chance of getting jobs.

It is just sad that three years were wasted, he said.

“We could see how the crisis situation worsened because of the delays. More than 300 000 young people have since joined the ranks of jobless people.”

Harris, however, said the act was a watered-down version of the government’s initial plan for a youth wage subsidy. He said the DA wants to strengthen the act by placing it back on the agenda and hoped those opposing in the tripartite alliance would not again delay reforming the economy.

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