Note to editors: The following statement was distributed at a press conference held in Parliament today by Democratic Alliance (DA) Leader Helen Zille along with other leaders of the DA and DA Youth.
Two days ago thousands of Democratic Alliance (DA) supporters marched to COSATU House in solidarity with unemployed South Africans and to protest against COSATU’s blocking of the Youth Wage Subsidy.
COSATU is blocking the Youth Wage Subsidy, and they violently and illegally tried to block our march.
What happened in the Jo’burg CBD on Tuesday will come to be seen as a turning point in South Africa.
Every South African now knows that the DA stands up for the unemployed, and that COSATU opposes their interests, even violently.
Since then, COSATU has tried every line imaginable to muddy this simple truth, but it has failed. COSATU can no longer continue to masquerade as a champion of the unemployed.
The DA is more resolute than ever to mobilise all South Africans for the immediate implementation of the Youth Wage Subsidy, structured on the model proposed by the national Treasury, which is a model we support. The treasury has budgeted R5 billion for this, which is stagnating in the budget despite record levels of youth unemployment.
The Youth Wage Subsidy will benefit more than 423 000 people in the first three years of the programme. Beneficiaries will be young, first-time job seekers, many of whom have completed matric or have tertiary qualifications but who cannot find that crucial first job.
The exponential knock-on effect of these 423 000 opportunities would literally benefit millions more people.
The DA has been calling for a youth wage subsidy programme for ten years. It is now supported by business, government and FEDUSA, the second largest trade federation.
The programme has had resounding success elsewhere in the world. Unemployment was literally halved in Singapore between 2003 and 2007, in part due to the implementation of a youth wage subsidy. Several middle-income countries have also adopted wage subsidy programmes including Korea, Mexico, the Slovak Republic, Chile and Turkey. The latter two have deliberately targeted young workers in their programmes.
The subsidy will be paid over to complying businesses in the form of a tax credit, and will therefore be administered by the SARS. Employers who grow their labour force by employing people between the ages of 18 and 29 will be eligible to receive the wage subsidy.
All in all, the Youth Wage Subsidy would deal a destructive first blow to the wall that still divides South Africa’s economy between the employed and the unemployed. It will let hundreds of thousands of people into the economy for the first time, and will unlock a virtuous cycle that will kick-start growth and development.
The question is not if government should be doing this, the only question is why it hasn’t already begun. The answer is COSATU.
Over the coming weeks we will be intensifying our Youth Wage Subsidy Now! campaign. We will make sure that everyone understands the significant job creation and economic growth potential that it holds, and why its implementation is being blocked.
We will use every platform available to us to make these points, and our entire party will be involved. Here are some of the details:
The Youth Wage Subsidy Now! Campaign
1. Address NEDLAC
Firstly, I will today write to NEDLAC to request an opportunity to address the Council at their next meeting.
The Youth Wage Subsidy has been stuck in NEDLAC for two years, where COSATU wants to keep it bogged down until government abandons the project. We are reliably informed that COSATU is refusing even to discuss the policy at NEDLAC. This is despite the fact that South Africa’s second largest trade union federation Fedusa supports the principle of a Youth Wage Subsidy.
I believe it is necessary to highlight to the Council the need for urgent progress on the Youth Wage Subsidy, and to set out some of the successes of the DA’s own version of a wage subsidy scheme which we’ve recently implemented in the Western Cape.
2. Meeting with President Zuma
Should NEDLAC not be prepared to allow me an opportunity to address them, I will seek a meeting with President Zuma in which I will ask him to proceed with the Youth Wage Subsidy without the support of NEDLAC.
NEDLAC is a consultation chamber, and government is not obliged to wait for NEDLAC to reach a consensus on a particular issue before proceeding. We believe that while every effort should be made to reach consensus at NEDLAC, this issue is too important to allow for any further delay.
3. Wage Subsidy Success Stories
I will also visit factories and businesses in the Western Cape where the DA government’s Wage and Skills Programme is already succeeding, with hundreds of young people being hired in new jobs, backed by a provincial government subsidy. We call upon national government to release the R5 billion budgeted for this purpose to the Western Cape so that we can demonstrate how well it is working.
This will highlight how much more successful the programme could be if it was implemented nationally, and how hollow COSATU’s arguments are in opposition to the proposal.
4. The Parliamentary Platform
The DA’s team in Parliament will use every parliamentary mechanism available to pressurise the government and hold it to account for the commitment made in President Zuma’s 2009 State of the Nation Address that the Youth Wage Subsidy would be implemented in 2010.
Firstly, we will call for a debate on the Youth Wage Subsidy for a sitting immediately after the budget process has been concluded.
Secondly, we will submit an urgent oral question on this matter to President Zuma at the earliest possible opportunity to do so.
Thirdly, we will request the Chairpersons of the Finance Portfolio Committee and the Labour Portfolio Committee to call Zwelinzima Vavi before the two committees to engage him on his concerns about the effects of the Wage Subsidy on the age of the workforce.
Fourthly, we will table an amendment to the tax laws in the Standing Committee of Finance to include money to fund the youth wage subsidy. The Money Bills Amendment Act allows Parliament’s Finance and Appropriations committees to amend the national budget or any other money bill. We will propose in committee that the Pay as You Earn (PAYE) tax loss to fund the first year’s subsidy (which should not exceed R1,6bn) should come from the R5,7bn contingency reserve budgeted for this year.
5. Public Education Campaign
A representative poll conducted in recent weeks by the DA, revealed that 88% of respondents do not know what the Youth Wage Subsidy is.
When the Youth Wage Subsidy concept was explained to them -
- 67.4% of respondents think the Youth Wage Subsidy will lead to more employment’
- 6.3% think it will increase unemployment,
- 14% think it will make no difference and,
- 12.3% don’t have an opinion.
This highlights the need for an extensive public education campaign to inform the public of the benefits of the wage subsidy programme.
To this end, the DA will in the coming weeks be contacting millions of South Africans by:
- distributing more than three million pamphlets around South Africa,
- sending out SMSes to more than 250 000 people,
- sending informative emails to more than 300 000 people,
- holding public information events around the country,
- meeting with civil society groups, academics, economists and other labour federations to build momentum for the wage subsidy programme,
- running an online campaign using social media and the DA’s Youth Wage Subsidy website, www.youthwagesubsidynow.org.
6. Provincial Campaigns
Our structures in all the provinces will drive provincial campaigns to implement programmes similar to the Western Cape’s version of a wage subsidy, the Wage and Skills Programme.
The DA’s public representatives in the Provincial Legislatures will table motions and private members’ legislation to this effect, and will organize public events to build momentum behind these efforts.
This week the DA is more resolute than ever. We will stand side by side with the unemployed and will defend their right to access the economy and get a fair chance to build a better future for themselves and their families.
We repeat our call for COSATU to drop its indefensible opposition to this job creation initiative that is sensible, proven and affordable.
We are doubling our efforts, and we will mobilise all South Africans behind our call for a Youth Wage Subsidy Now!
Pierre-Charl du Preez
Spokesperson in the DA Leader’s Office
084 251 0633