Speaker, the hon member refers to section 12(1) of the Income Tax Act, announced in the 2011 Budget. As of 31 October 2011, the Minister of Trade and Industry has approved eight major industrial projects in terms of this particular scheme.
These projects will create 21 112 direct and indirect jobs and result in a total investment of about R9 billion by the private sector. The projects cover a broad range of industrial sectors, including agroprocessing, biofuels, pulp and paper, and chemical and plastic industries.
As you know, this particular tax-based incentive scheme caters for large industrial projects with a minimum greenfield investment value of R200 million in manufacturing assets. These projects have been selected on the basis of their strong backward and forward linkages and their potential to create jobs along the entire value chain.
We do not have information on the number of people who have since been rehired. We are, however, very reassured by the strong improvement in employment creation over the past year. After the substantial job losses from the time the global economic downturn started in late 2008, through to the end of last year, employment creation has recovered very satisfactorily.
The latest Statistics SA survey shows that total employment grew by 340 000 from the third quarter of 2010 to the third quarter of 2011, or by 2,7%. Formal employment increased by 390 000 or 4,3% in the same period. This reflects a faster rate of growth than the GDP. Thank you.
Speaker, I would like to apologise to you and the President for arriving late; I had an appointment that was quite a distance away. [Inaudible.]
Mr President, I think the majority of the people in the country agree with the Deputy President's warning that unemployment is a ticking time bomb. As we speak, the Development Bank of Southern Africa, DBSA, warned two days ago that if we are to create jobs, we need 10% growth. The Financial and Fiscal Commission, FFC, has a similar view: that, at a minimum, we need 8% to 9% growth.
Yet the Minister of Finance advised us a week or two ago that the growth rate that we will probably achieve is 3%, or 4% at best. That means we will not be able to create jobs in the manner government has promised.
Now, the big question is, what is government going to do in the light of those projections because, as the Deputy President said, unemployment is a ticking time bomb? What steps are we taking to avoid this situation? Because when these realities happen, we will be faced with a rebellion from increasing numbers of young people in this country. Why is government persisting with the idea that it will create 500 million jobs under these circumstances?
Speaker, the hon member will, of course, know that when government said it was going to create a specific number of jobs, it was discussing the matter in the context of a global recovery from the financial problems of 2007-08. Things, of course, have changed. We now have another financial crisis.
South Africa is not an island so that, when the world is faced with this difficulty, it can move as if nothing had happened. That crisis affects everyone. In fact, the question of unemployment is a global problem. As long as you have these economic problems you cannot move faster in terms of growth.
Consider, as an example, the situation today where the Eurozone is in difficulties. We are still on the positive, not on the negative, but we can't grow as fast as we thought we could. Nobody could have predicted that there would be this global situation when we said that we were going to grow at a particular rate. We based our outlook on the economic landscape at the time.
What is government going to do? I don't think we can perform magic. We are going to try to do whatever we can to ensure that we are able not just to move faster so as to grow up to 9% or 10%, but also to ensure that we stay in the positive.
The Minister indicated here what we are doing as government to keep our economy afloat and at the same time create employment. There are very specific things that we have done. We have, for example, put aside R800 billion for infrastructure. That is one specific thing that tends to create jobs, and you have already said that, in terms of the statistics, we are in fact creating jobs, but just not at the rate at which we had said we would.
However, given the plans that we have put in place, we are confident that we are going to create jobs and we are going to deal with the situation. In the face of the global economic crisis, we are still moving forward. Thank you.
Ngiyabonga Somlomo, ngibonge nakuMongameli. [Thank you Speaker, and thank you to the President as well.]
Speaker, we have learnt that there is a shortage of skills, hence the roll- over of infrastructure funds. What role can infrastructure development play in job creation and skills development and how can the Presidential Infrastructure Co-Ordinating Commission assist with this? Thank you.
Speaker, the Presidential Infrastructure Co- Ordinating Commission will certainly play a role. That commission is going to look at very specific projects, particularly if you take into account that, as I have just said, resources and funds have been put aside for infrastructure.
We are working very hard on a plan to deal with very specific national infrastructure projects. Once we start up infrastructure projects, it certainly create jobs and in the process, as it has been experienced, people learn skills. Once there has been infrastructure development, and by the time it has been completed, there are people who qualify for certain skills. So, in a sense, we will be making a contribution.
Of course, we are inviting the private sector to participate as well. So we believe the plans we have will, in a sense, contribute towards skills development.
In addition to the area of infrastructure, we are also concentrating on skills development at other levels, including the level of higher education, through, for example, reviving the colleges so that we are able to create skills at a faster rate. We certainly hope our plan will help address the challenges you are talking about. Thank you.
Speaker, in admitting that the Industrial Development Corporation could do more for sustainable job creation, the chief executive, Mr Qhena, said there are many hurdles with regard to policy that are holding it back, and that there has to be more policy adjustments at government level.
Can the President expand on this, on whether or not progress is being made in adjusting these policies, and what the hurdles are? Thank you.
Speaker, I wish I knew what the specific bottlenecks are that I am supposed to comment on and whether we are doing something about them.
We have been working hard and, I have said this repeatedly, we are trying to move away from the slow-paced manner in which governments do things. We want to do things differently. That is part of what we have been trying to do, to say that we can be quicker and better in terms of how we implement our policies and how we deal with bottlenecks.
Government does this continually. It is not as if we are going to start afresh by asking what we can do. We do it at all material times by asking how we move forward. As you say, we need to industrialise, and part of what we are saying is that we need to create more opportunities, thereby creating more possibilities and opportunities for our citizens so that we are able to employ our skills.
We also need to deal with those with new skills, who don't have any experience when coming out of the tertiary institutions. We have plans on how to handle that so that we can move forward more quickly and cause all our skills to engage with the challenges. Thank you.
Mr Speaker, last week the hon Deputy President said in the House that the major obstacle to the implementation of the youth wage subsidy, which you promised to implement two years ago, was the resistance of the unions, and Cosatu in particular.
Mr President, it is a matter of fact that, if government had implemented the youth wage subsidy in April 2010, nearly a quarter of a million young South Africans would by now have had the opportunity to move from poverty into gainful employment. A policy deadlock between Cosatu and the government has kept these young people out of work, and was listed by ratings agency Moody's ...
Speaker, I rise on a point of order: I think there is some problem with the listening skills, because the Deputy President spoke in the House, but the words that are being put in his mouth were never uttered by him in the House.
HON MEMBERS: Yes, they were! [Interjections.] [Applause.]
Please conclude, hon member.
Mr Speaker, I would like enough time to finish my question, please. That was not a point of order.
Conclude, hon member.
Mr President, it is a matter of fact that, if the government had implemented the youth wage subsidy policy in April 2010, nearly a quarter of a million young South Africans would by now have had the opportunity to move from poverty to employment.
A policy deadlock between Cosatu and the government has kept them out of work and was listed by ratings agency Moody's as a major reason for yesterday's downgrade of South Africa's debt outlook. Mr President, this cannot go on. How do you plan to meet the new deadline of 1 April 2012 for the implementation of the youth wage subsidy policy?
Speaker, I am sure that we all agree that, in a democratic country, consultation and engagement are important. Only in countries where there are dictatorships would a government just pass a decree if it had an idea.
If we said we thought there needed to be an incentive with regard to the youth such as we talked about, and we said to Cosatu - that very strong and powerful trade union movement - that we didn't care what it said, and we just proceeded, then you certainly would have said that this is an autocracy. You would have said that government doesn't listen to the people's voices; it just moves.
We have been engaging Cosatu on this matter because it is important to do so. That is part of the elements of democracy. In a democracy, you do not move ahead just because you are convinced; you have to take your citizens along, no matter how you feel. This is what we have been doing and we have made a lot of progress with Cosatu on this matter.
There has been no progress for two years! [Interjections.]
Order, hon members! Order!
Of course you would say there is no progress because you don't know. If you want to be part of the discussions, then join the ANC, and be part of government. You will then be part of the negotiations.
We have made very good progress on this matter and we are very happy with the progress we have made. You will see the results very soon. Thank you.
I thank the President, and am reminded that the Deputy President, in fact, said that this matter is being discussed in Nedlac.
See also QUESTIONS AND REPLIES. Debate concluded.