President Jacob Zuma has said his government will stand firmly by their plan to implement a planned wage subsidy aimed at cutting youth unemployment. Its specifications will still be negotiated, but his reassurance comes days after violence flared up at a march where the DA tried to march on Cosatu House to highlight Cosatu’s opposition to the scheme.

Zuma was responding to the DA’s parliamentary leader, Lindiwe Mazibuko, when he revealed that the government, while open to discussions, fully intends implementing the scheme.

As it stands, the government’s plan is for the youth subsidy to be made available for workers under the age of 30.

Their salaries will need to be below the personal income tax threshold, and the subsidy would be paid for a maximum of two years, capped at a maximum value of R12 000.

One of the chief concerns with the subsidy scheme is that it would result in older, higher-paid workers being replaced by younger workers.

Zuma didn’t agree, and said:

For example, firms will only be able to access … the incentive if they create additional jobs for young and inexperienced South Africans above current employment levels. The incentive targets a net rise in youth and overall employment.

He also said laws will protect older workers from being replaced by younger workers, and thus the scheme would regulate itself. Labour laws already prevented the retrenchment of older workers.

R5 billion has been put aside for the subsidy, which was due to commence in April, but it has been on hold because of Cosatu’s objections during talks at the National Economic Development and Labour Council (Nedlac).

The DA has since laid a charge of intimidation against Cosatu after Tuesday’s violent march.

[Source: BusinessDay]