STATEMENT BY TIM HARRIS MP AND LINDIWE MAZIBUKO MP, DA MEMBER OF THE SELECT COMMITTEE ON FINANCE AND DA NATIONAL SPOKESPERSON, May 31 2010

DA calls on President Zuma to implement Youth Wage Subsidies

The Democratic Alliance (DA) is urging President Jacob Zuma to stand up to those in the tripartite alliance blocking the youth wage subsidy policy he announced in his State of the Nation address.

We express our dismay that Treasury missed their end-March deadline for the tabling of the discussion document and calculate that - given Minister Pravin Gordhan's estimate of the subsidy creating 500 000 new youth jobs by 2013 - the opportunity cost of inaction is around 17 000 new jobs per month. Put another way, every week that passes without Mr Zuma intervening to break the Cabinet deadlock costs us 4000 youth jobs.

We have, this morning, written to President Zuma calling upon him to intervene to end this deadlock, and give the nation his assurance that he will forge ahead with the design and implementation of a wage subsidy policy as a matter of urgency, as announced in Parliament. In addition, we will be writing to the Chairperson of the National Council of Provinces and the Speaker of the National Assembly to give notice that we intend moving a motion that both Houses urgently debate the issue of youth unemployment. 

As South Africa prepares to celebrate and commemorate Youth Month, President Zuma's Cabinet is engaged in an ideological standoff over this crucial policy proposal. A wage subsidy has the potential to address the youth unemployment crisis, but whose implementation is being stalled by the governing party's Alliance partners, who oppose it on the most spurious of grounds.

According to Stats SA's Quarterly Labour Force Survey released earlier this month, more than 3.1 million young South Africans aged 15-34 were unemployed in the first quarter of 2010.  This figure represents 72% - or almost three quarters - of the unemployed in our country.

The situation has worsened this year. In the past 12 months, 833 000 jobs have been lost countrywide. This means that unemployment is now at 25% (36% if discouraged work seekers are included) and youth unemployment is at more than 40% (more than 60% if discouraged work seekers are included).

In this year's Budget Speech, Finance Minister Pravin Gordhan specified that the headline policy to tackle youth unemployment would be "a subsidy to employers that will lower the cost of hiring young people without work experience." This policy is directly in line with the wage subsidy proposal that the DA has campaigned on for many years.

Now, after six weeks of loud and poorly reasoned opposition to the youth wage subsidy, it appears as if Economic Development Minister Ebrahim Patel is championing Cosatu's effort to block the wage subsidy proposal.

And, as if buckling to this pressure, President Zuma - in a reply to a parliamentary question last week - reduced the wage subsidy policy to a conceptual debate, rather than the firm policy proposal which was put forward in the State of the Nation Address and the Minister Gordhan's Budget Speech.

While a diversity of opinion in any Cabinet should be an asset rather than a paralysing liability, this requires strong leadership to chart a course through any standoff.  Regrettably, Mr Zuma is failing to lead, and is allowing the dithering to continue over this matter. If the President continues to vacillate on this issue, we can only conclude that once again this Youth Day, the ANC government intends paying only lip service to the substantive challenges facing the young people of this country.

Today we present some of the proposals for the implementation of a youth wage subsidy policy and lend our support to Treasury's proposal for a targeted intervention to be implemented as soon as possible.

It is time for Mr Zuma to stand up for young South Africans and implement the youth wage subsidy: the productive careers of 3,1 million young job seekers depend on it.

Statement issued by the Democratic Alliance, May 31 2010

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