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Cosatu to Step up Fight Over Youth Subsidy

Friday, 20 December 2013   (0 Comments)
Posted by: Author: Linda Ensor
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Author: Linda Ensor (BDlive)

The Congress of South African Trade Unions (Cosatu) said on Thursday it would continue its fight against the Employment Tax Incentive Act even though it has now been signed into law by President Jacob Zuma.

The president’s signature on Wednesday means the act will take effect from January 1 as envisaged though it will apply retrospectively. This means that employers who took on young workers on or after October 1 can apply for the incentive.

Cosatu spokesman Patrick Craven said on Thursday the labour federation was "very unhappy" about the signature and would continue to insist that the act be referred to the National Economic Development and Labour Council — an unprecedented step. It would discuss its plan to call a general strike against the measure early in the new year.

Over the past two years Cosatu has fiercely resisted both the initial proposal for a youth wage subsidy and its replacement, the employment tax incentive, arguing that both would create a two-tier labour market and result in the displacement of older workers. It also opposed the use of state money to subsidise employers who would have created the jobs anyway.

But the Treasury believes it has addressed the concerns in the way it has designed the employment tax incentive, which it hopes will promote employment for young people aged 18-29 and create jobs in special economic zones once legislation providing for them has been promulgated. Under the act employers will receive a tax incentive to employ young workers for a maximum of two years under certain conditions.

The Treasury said on Thursday the government recognised that no one tool or incentive could be a panacea to solve South Africa’s unemployment problem, but believed the tax incentive had "the potential to make a real contribution toward the creation of new and additional jobs".

Meanwhile, an international survey of employment trends has concluded that most employers in South Africa would not be hiring significantly more people in the first quarter next year. The first-quarter global Manpower Employment Outlook survey, released this month by the ManpowerGroup found 15% of bosses expected to increase staff, 9% expected a decrease and 75% forecast no change, giving an overall net employment outlook of 4% or 6%.

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