A NEW plan to fight against youth unemployment was introduced on Thursday as the government and social partners signed a multibillion-rand pact in which companies and public entities undertook to create jobs and training opportunities for inexperienced job seekers.
The package was contained in a Youth Employment Accord signed by government, labour, business and other civil society representatives in Soweto on Thursday. Speaking at the signing ceremony, Deputy President Kgalema Motlanthe, who is acting president as President Jacob Zuma is out of the country, praised social partners for signing the deal after months of negotiations.
Mr Motlanthe said the Industrial Development Corporation (IDC) would set aside R1bn of its ‘Gro-E’ funding scheme to provide low-interest rate loans to youth-owned or youth-focused enterprises over the next three years. The IDC would also provide technical support to help young people get the funds.
The Motsepe Family Foundation, a charity organisation, would avail R100m over the next three to five years for youth co-operatives and enterprises, and a further R100m for education, mainly to benefit the youth. This was in an attempt to bring young people into the economic mainstream, Mr Motlanthe said.
Professional services company KPMG is part of a private sector Harambee programme that will place 3,000 young people in entry-level work by the middle of this year, with a target of 10,000 by the end of 2014.
The signing of the accord is seen as a breakthrough in a process that became deadlocked at the National Economic Development and Labour Council after unions pushed back the youth wage subsidy the government introduced two years ago.
The accord means the government has now officially gone back on the original concept of a youth wage subsidy, which would have cost R5bn in its three-year pilot stage, which was originally meant to start in 2011.
The new plan heavily leans on the private sector to play an active and significant role in creating new jobs meant for young people, while it emphasises some of the exiting government policies.
As part of the new plan, government departments will have to increase their intake of interns so that they equal 5% of total employment. This is to help the youth get the experience often required for employment in the private and public sectors.
Business and union leaders, including Congress of South African Trade Unions (Cosatu) president Sdumo Dlamini, backed the plan. African National Congress-aligned unions were the most vocal group in opposing the youth wage subsidy — a tax-based incentive scheme that would have given companies rebates for hiring young employees.
Cosatu argued that, under the youth wage subsidy, employers would fire older, unionised employees because of the incentive to hire younger ones.