EMPLOYMENT TAX INCENTIVE TO REDUCE UNEMPLOYMENT AMONGST YOUTH

15 November 2013

The Office of the ANC Chief Whip welcomes the commencement of the parliamentary public consultations process on the Employment Tax Incentive Bill, which seeks to encourage employers to open their doors to young people aged between 19 and 29 with no work experience. The process that parliament is beginning today is significant to our country's war against unemployment, particularly amongst young people.  Statistics show that the majority of those who bear the brunt of unemployment in this country are the youth.

According to the recent labour force survey, youth aged between 15 and 34 constitute about 70% of those unemployed.  The National Youth Accord was signed earlier this year as a multi pronged intervention to grow youth employment. The Employment Tax Incentive Bill is therefore one of the many initiatives under the Accord aimed at drastically reducing the levels of unemployment in South Africa.

It will complement existing government programmes such as the Expanded Public Works Programme and Community Work Programme, skills development under the auspices of the Further Education and Training colleges, the Sector Education and Training Authorities, the National Skills Fund and programmes that support enterprise development under the Industrial Policy Action Plan.

We have no doubt that the incentive will encourage the private sector, which employs over 70 per cent of those in formal employment, to expand its intake of young workers. This will contribute towards the reduction of unemployment in general. This, together with numerous other government job creation efforts, will put our country on the right path to creating 11 million jobs by 2013, as envisaged in the National Development Plan.

Millions of young South Africans are hungry for workplace experience, for job opportunities and to build their future and the future of the country's economy. Government estimates that the tax expenditure will cost between R1 billion and R2.3 billion over two years, which will no doubt make a contribution towards improving the material conditions of our young people.  We appeal to all stakeholders to support this progressive initiative, which we are confident parliament will pass to ensure it comes into operation from January 2014.

The Bill makes provision for various penalties aimed at deterring employers from abusing or transgressing the provisions of this legislation. For instance, any employer found to have displaced an employee in order to further access the tax incentive will be disqualified from receiving the incentive.

Statement issued by the Office of the ANC Chief Whip, October 15 2013

Click here to sign up to receive our free daily headline email newsletter