Picture: THINKSTOCK
Picture: THINKSTOCK

PRESIDENT Jacob Zuma’s state of the nation address on Thursday was thin on detail on how South Africa would tackle youth unemployment — saying the National Economic Development and Labour Council (Nedlac) had agreed on "key principles" for "youth employment incentives" and parties would soon sign an accord that would not include the contentious youth wage subsidy.

The African National Congress (ANC) last month said that the party and state top brass had agreed on youth employment incentives that may include the youth wage subsidy, which Mr Zuma had first raised in his 2010 state of the nation address but which ANC ally the Congress of South African Trade Unions (Cosatu) vehemently opposed.

Talks within Nedlac for business, labour and the state began almost two years ago, after Finance Minister Pravin Gordhan set aside R5bn in his 2011 budget for the subsidy.

Business and the Democratic Alliance (DA) pushed ardently for the implementation of the subsidy — DA and Cosatu members clashed last year during a march by the DA to the trade union federation’s Johannesburg headquarters. Cosatu’s opposition to the subsidy stems from its belief that subsidising companies to hire young people will lead to older workers losing their jobs.

“The incentives will add to what government is already doing to empower the youth,” Mr Zuma said.

It appeared that the subsidy was off the table, with Cosatu general secretary Zwelinzima Vavi tweeting that interventions to address youth unemployment would be announced later this month.

“They don’t include the youth wage subsidy — good news!” he said.

Mr Zuma appealed to the private sector to absorb 11,000 further education and training college graduates who waited for placements. Public enterprises were providing apprenticeships and the Department of Rural Development ran the National Rural Youth Service Corps, which enrolled 11,740 young people in a number of training programmes. The state would also use the expanded public works programme to absorb unemployed young people.

At a media briefing earlier this month, ANC secretary-general Gwede Mantashe said the ruling party and Cosatu had agreed on the youth wage subsidy. The federation thereafter issued a statement saying there was no agreement and that it would wait and see what the youth employment incentives punted by the ANC had to offer.