Speaker, the youth employment subsidy discussion paper entitled "Confronting Youth Unemployment: Policy Options for South Africa" was released on Budget day, as we all know. The discussion paper proposed that the youth employment subsidy be implemented from 2012, following a process of consultation that included firstly, discussion between the economic sectors and the employment cluster of the youth employment subsidy, as part of the multipronged strategy to tackle youth unemployment.
Secondly, discussions were initiated on the youth employment subsidy and other proposals through the Nedlac process to gather further inputs from social partners.
Finally, proposals were made to the Cabinet. Discussions have taken place within the economic sectors and the employment cluster, and consultation with social partners began at Nedlac on 10 May 2011. These discussions are ongoing and, alongside the public comments received on the discussion paper, will inform a revised document. Thank you.
Speaker, I would like to thank the Minister for his response. Minister, you are reported to have said that South Africa can only create 4 million jobs by 2025 on our current growth trajectory and that this is not enough to make a dent in unemployment. This is below the New Growth Path objective to create 5 million jobs by 2020. A youth wage subsidy is a fiscal policy intervention to lower the price to employers of new and inexperienced workers, but it will not resolve the problem of unemployment and poverty on its own.
Hon Minister, you have said: "We may have to change the labour dispensation in South Africa". We know that Cosatu does not support the youth wage subsidy. What steps are you taking to ensure that their opposition to it does not prevent its implementation? Thank you.
Speaker, the hon George is conceding that, firstly, we do need ambitious targets for job creation in South Africa. Secondly, the whole purpose of the New Growth Path is to set the economy on a trajectory which will enable us to begin to reach out to that kind of ambitious target.
Nowhere in the New Growth Path do we suggest that the youth wage subsidy is the only way in which we will get there. There is a host of measures, which include, amongst others, microeconomic and macroeconomic sectoral interventions and the Ipap programme that Minister Davies is championing, that will be required to get us to the 5 million jobs.
Let us also be very mindful of the global economy and the dynamics that are unfolding there. All of that also will have a serious impact upon growth prospects in South Africa. Exactly what those impacts will be will be determined in the next few months as we get some level of stability within the global situation, if we get there at all.
The discussions in Nedlac are aimed precisely at understanding the concerns, some of which are very legitimate, such as: Will workers that are subsidised through the youth wage subsidy replace existing permanent workers in an enterprise? Will there be other unintended consequences? Our appeal to everyone concerned is that the youth wage subsidy is only one instrument amongst many others. There are other strategies being worked upon as well and, finally, if there are design issues as far as youth wage subsidy is concerned, let us sit around the table and find relevant answers. Thank you.
Mr Speaker, to the hon Minister, my question is in regard to those unintended consequences that you have just touched on. In implementing the proposals, what monitoring process do you foresee being in place to prevent the growth of businesses whose only rationale is to absorb public money through subsidies, to prevent employers replacing unsubsidised workers, as you mentioned, with the subsidised ones and to prevent the wasting of government money if jobs that would have existed in any event are also subsidised? Thank you.
Speaker, these are precisely the kinds of issues that we hope to address through the Nedlac and other processes. Clearly - and I must reiterate this quite emphatically - the intention is certainly not all of the issues that hon Dudley has mentioned as the outcomes of any process like this. However, let me also reiterate that we should not think that the youth wage subsidy is the panacea for the unemployment problems that we have in South Africa.
There are many more things we need to do to restructure and reposition our economy. The monitoring mechanisms, in this particular regard, will, certainly, have to ensure that the kind of consequences that the hon member is speaking about are not the outcomes of any of this process.
Mr Speaker, the Minister is correct in saying that the New Growth Path does not say that the youth wage subsidy is the only way of tackling youth unemployment, mainly because the New Growth Path does not mention the youth wage subsidy. Nevertheless, Mr Speaker, in February this year, National Treasury published the discussion document on the youth wage subsidy-10 months late. The former director-general said that the discussion document appears to present the subsidy as a definite plan which would have been implemented on 1 April, but it was a proposal and not a policy of government. So my question is: Is this a proposal or a policy? Secondly, what are the prospects of Treasury missing their second major deadline on implementation of the youth wage subsidy?
Speaker, given that we are saying this is one of many proposals before all of us to find solutions to, in particular, youth unemployment in South Africa, there is nothing fatal about missing one or other deadline. The real issue is: how do we accommodate all of the concerns there might be? How do we accommodate alternate ideas that there might be on this particular issue of the youth wage subsidy or anything else?
What hon members need to focus their minds on is what alternate proposals we have. What other ideas do we have to create employment in South Africa? Hon members should rather not take this kind of approach, which I don't think is helpful ultimately. So, in direct response to hon Harris, a lot depends upon the consultation processes as to whether this or any other idea gets off the ground. However, I must reiterate that we share the urgency, that I hope other members share as well, that something needs to get off the ground to ensure that unemployed youth do have better prospects than they have had up to now.
Speaker, through you to the Minister, the ANC would like to understand whether the private sector will be involved in the youth wage subsidy. If so, what criteria will be used to select those companies that will be utilising a subsidy? That is the first one.
The second one, within the consultation process, some of the ...
Hon member, the rule is just one question, not a series of questions.
Sorry Speaker, it is a follow-up. [Laughter.] It is a continuation.
Is it a continuation of the follow-up? [Laughter.]
Yes. [Laughter.]
Please conclude, hon member.
Speaker, some of the stakeholders raised an issue that the subsidy might be abused in the sense that the companies will retrench their employees and then employ the youth, to be in a position to utilise the subsidy. Based on that, hon Minister do you have any monitoring measures regarding that? [Time expired.]
Speaker and hon Dubazana, the private sector is involved through the Nedlac process and the criteria will be the willingness of a company to abide by the conditions of the youth wage subsidy. In that sense, the companies will self-select. On the issue of monitoring, I actually answered that question when I responded to the earlier ones. Thank you.
Particulars regarding co-operation by department in relation to investigation into awarding of Sishen prospecting rights
137. Mr P D Dexter (Cope) asked the Minister of Mineral Resources:
Whether her department is co-operating fully in the investigation with regard to the awarding of Sishen prospecting rights to Imperial Crown Trading; if not, why not; if so, what are the relevant details with regard to the raid on her office by the Directorate for Priority Crimes Investigation (Hawks)?