Jeff Radebe. Picture: FINANCIAL MAIL
ANC head of policy Jeff Radebe. Picture: FINANCIAL MAIL

THE youth wage subsidy is still on the table, and is likely to form part of a raft of "incentives" to promote employment for the young, the African National Congress (ANC) said on Thursday.

The subsidy has been a point of contention between the ANC and its ally, the Congress of South African Trade Unions (Cosatu), which is vehemently opposed it on the grounds that subsidising businesses to hire young people will displace older workers.

The Treasury has already set aside R5bn for the subsidy to create 423,000 new jobs, but Cosatu’s opposition has stalled its implementation for nearly two years. It is estimated that 50% of people between 18 and 29 years old are unemployed.

ANC head of policy Jeff Radebe on Thursday indicated the party’s appetite for "youth wage incentives" had not diminished.

"The youth wage incentive is an issue that’s been on the table for quite some time now. The processes in Nedlac (the National Economic Development and Labour Council) have not yet been concluded," he said.

"As the ANC we want to move with speed on this issue because we are ready."

While the minister of finance had already budgeted for the incentives and the party believed it could help to draw large numbers of young people into employment, Mr Radebe said the ANC would not "rush" into it without talking to its social partners.

"We are hoping that before the state of the nation address, or soon thereafter, there must be a bilateral between the ANC and Cosatu in particular to deal with this issue," he said.

"We do know that there are many people within the business sector who are looking forward to the resolution of this issue."

Mr Radebe was speaking ahead of a three-day ANC national executive committee lekgotla — which includes party leaders and senior government officials — taking place in Irene, Gauteng.

While the discussions to unfold this weekend would culminate in a final decision on the subsidy, Mr Radebe was clear that the ANC favoured such incentives.

"It will depend on the outcomes of these engagements, but we want to do it — that’s our intention as the ANC," he said.

Secretary-general Gwede Mantashe said on Thursday there was a difference between incentives and the subsidy.

Incentives pointed to mechanisms which made employing young people "attractive", he said, adding that "... the wage subsidy may be one of those incentives".

There are a number of other ideas on the table this weekend to induce companies to employ youths. According to a resolution adopted at the ANC’s conference in December, which were released on Thursday, labour, the government and business had to unite to tackle youth unemployment without placing existing workers at risk.

The resolution said that the state had to "act to improve the quality of active labour market policies and create incentives for absorbing the young unemployed", in order to help unskilled young people.

The party noted that even if annual economic growth rose to 5%, unemployment among 15 to 24-year-olds would be 44% and 31% by 2020 and 2030 respectively, "in the absence of special other interventions".

Returning the youth wage subsidy to the party’s agenda may heighten tension between the ANC and Cosatu.

The lekgotla will also discuss another contentious issue taken up by Cosatu unions — Eskom’s application for a 16% electricity price hike for each of the next five years.

Mr Mantashe said there was a "stronger" emphasis at the lekgotla on the party assessing the performance of its government.

The meeting had already received a briefing on the country’s financial outlook — giving it a sense of what is "possible and not possible", he said.

Cosatu spokesman Patrick Craven said on Thursday the federation would comment on the subsidy only after it received a report from its leaders at the lekgotla.