The "Social Accord on Youth Employment" is a betrayal of our unemployed youth

The youth employment accord released today is a national embarrassment and represents a betrayal of South Africa's 4,7m unemployed youth. There are three main problems with it:

Firstly, National Treasury's Youth Wage Subsidy (now called the Youth Employment Tax Incentive) - which is the only policy on the table that would create real new jobs for young people - has been left out of the document.

Cosatu and the cabinet ministers aligned to Cosatu have blocked the Youth Wage Subsidy for more than three years on ideological grounds, but for them to put forward this amateurish document full of half-baked, weak ideas as their alternative is simply embarrassing.

The end result is that government, through this accord, and led by Cosatu, is contradicting National Treasury's commitment to implement the Youth Wage Subsidy. This is exactly how the policy has been blocked for the past three years, so the standoff looks likely to continue.

Secondly, this accord, with its interventionist, public-sector-led, distortionary proposals, is almost entirely inconsistent with the National Development Plan (NDP).

In contrast to the NDP, most of the ideas in this "accord" are unrealistic, economically unsound, and have clearly not been thought through. The few that have merit (e.g.: "improve education and training" and "government internship programmes") are nothing but high-level platitudes that have been put forward by this government countless times with no implementation.

Thirdly, most of the ideas in this document will simply not work to create new jobs.  There is no way that "youth brigades" and "youth co-operatives" can even begin to create the 4,7 million jobs we need for South Africans under the age of 34. "Youth target set-asides" would have a significant distortionary effect on the labour market.

One only has to contrast this "accord" with the Youth Wage Subsidy document and the NDP to see how deep the ideological divide at the heart of the ANC government has become. Tragically, South Africa's unemployed youth will continue to be the casualties of the crippling deadlock it has caused.

Statement issued by Tim Harris MP, DA Shadow Minister of Finance, April 18 2013

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