YCLSA Rejects the Employment Tax Incentive Bill
The Young Communist League of South Africa [uFasimba] has noted that the National Treasury's ‘Draft Employment Tax Incentive Bill' represents the re-introduction of a youth wage subsidy under a different name.
The ‘Draft Employment Tax Incentive Bill' is a product of consistent efforts by the Treasury, which is the highway of entry and has become the harbour of neoliberal ideology in our government. The Treasury has been pushing for the youth wage subsidy for a sustained period of time now. However, its ‘Draft Employment Tax Incentive Bill' which represents the continuity and no change to the youth wage subsidy appears to have been rushed. This is partly reflected by simple errors in the Bill such as references to "counsel" instead of council with regards to bargaining councils.
The Bill misleadingly appears as if it seeks to prevent the likely displacement of employed workers, especially older and non-qualifying employees. The displacement is more likely become a phenomenon as a strategy of the employers by shifting from older and non-qualifying employees to qualifying employees in order to benefit from the youth wage subsidy - "employment tax incentive". A mere reference to unfair and automatically unfair dismissals which the Bill promises to act against through a penalty will not prevent the displacement of older and non-qualifying employees.
Should the Treasury have done research it would have noticed that since the inception of the philosophy of fair labour relations in South Africa introduced under the Labour Relations Act, Act 66 of 1995, there are millions of workers who lost their jobs in the economy through avenues of a fair dismissal. There is nothing in the Bill that prevents employers from following similar avenues to displace older and non-qualifying employees as they shift focus to benefitting from the youth wage subsidy through the exploitation of younger, low paid, and thus qualifying employees.
The Bill moves from an ill-advised premise concerning minimum wages, especially those that are determined through collective bargaining. It proposes that the employers who are bound by collective bargaining agreements extended by the Minister of Labour in terms of Section 32 of the Labour Relations Act can only qualify for the "incentive" (subsidy) if they pay workers the minimum wages prescribed in those agreements, assuming that the set minimum wages do not exceed the ceiling of R6000 per month per employee. This ignores at least four facts.
Firstly, it is not all collective bargaining agreements that are extended by the Minister of Labour in terms of Section 32 of the Labour Relations Act. Not all collective bargaining takes place under the auspices of bargaining councils.
Secondly, there are higher than minimum rates of wages that are paid in terms of collective agreements. The proposal by the Treasury is likely to erode the higher than minimum rates of wages because the employers are more likely to enforce minimum rates of wages as a strategy to qualify for the subsidy.
Thirdly, the R6000 qualifying ceiling has nothing to do with offering young people through employment to acquire scares and critical skills because employment in such skills is generally remunerated at more than the set ceiling.
Lastly, the proposal by the Treasury seeks to build a low-road employment strategy based on cheap labour, and will thus deepen the rate of the economic exploitation of workers by the capitalists. The subsidy that the Treasury is obsessed with is not a stipend for trainees undergoing disciplined and well-structured skills development programmes.
In its very essence, the proposal has the effect of undermining well-structured and disciplined skills development programmes such as apprenticeships, learnerships, internships and experiential training. Since the beginning of transition to democracy in 1994 there are many employers who, for racist and neoliberal reasons, among others, increasingly avoided these training programmes. Some of the employers, has the Treasury bordered to do some research, were actually comfortable in abusing these programmes by subjecting workers to production for profit instead of providing them with the training they were engaged for.
The YCLSA is firmly opposed to youth wage subsidy. Depending on the direction taken by the Treasury the YCLSA will canvas among its peers and other progressive formations for, and lead, sustained mass mobilisation against the youth wage subsidy. The least the Treasury can do if it is indeed interested in scarce and critical skills is to establish an incentive scheme to expand funding for apprenticeships, leanerships, internships, experiential training and assessments for recognition of prior learning as well as the National Student Financial Aid Scheme. This should be coupled with energy in driving the introduction of quality free education.
Most importantly, the Treasury must be interested in the structural transformation of the economy. It will take a qualitatively different growth path and economic development in addition to well-structured and disciplined skills development programmes to address the problem of unemployment.
We will also join the Congress of South African Trade Unions [COSATU] in their mass action and support their section 77 application at NEDLAC.
Statement issued by Buti Manamela YCLSA National Secretary, October 17 2013
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