Deputy Speaker and hon members, let me start by restating the point that has been made on numerous occasions, that of the objectives of this Bill. The Bill aims to improve employment prospects for young workers over the medium term by giving them experience. Moreover, Government would like to share with employers the initial costs of hiring young people to boost job creation. Work experience gained will improve their long-term employment prospects. We also need to incentivise employment in the special economic zones and designated industries, as identified by the Minister of Finance. Those employed under these tax incentives will enjoy protection under labour law in the same way as do those who remain and who are currently employed.
The Employment Tax Incentive Bill gives impetus to the announcement made by the President in his 2010 state of the nation address - or perhaps it was in 2011 - that government would subsidise the cost of hiring young workers.
In 2011 the National Treasury developed a policy document for discussion to give further clarity on the state of the nation reference, as pronounced by the President. That policy document, Confronting Youth Unemployment: Policy Options for South Africa, was the culmination of a research programme that looked into and analysed global options in addressing youth unemployment. To date, it remains the most comprehensive document on the subject.
The issue of youth unemployment is rife in South Africa. This is not a slogan. On Tuesday Statistics SA released the numbers. Of the 10,4 million unemployed people, 3,1 million are young people with no job experience, and are not at school or in training. Therefore, it cannot be that we end up with the highest number of unemployed people in South Africa being young people, and we stop there. We have to do something. As I said, the issue of youth unemployment is rife in South Africa. It affects all of us, but it has an especially debilitating effect, psychologically, on our young people.
Let me remind hon members, those on my left in particular, and particularly the hon Harris, who serves on our committee, that the issue of youth unemployment is not something that the ANC is raising today because it has become fashionable to talk about it. [Interjections.]
Let me remind you of this. If you have read our resolutions, and I think that you take most of our policies and do so, you will actually have read the resolutions of the ANC at Polokwane. You will know that the 52nd national conference of the ANC at Polokwane noted that the vast majority of the unemployed were black youth and women, many of whom had never held full- time employment and lacked the skills to gain entry into fast-growing sectors of the economy.
Our key challenge is to address the mismatch between the supply of largely unskilled and semiskilled labour that our history has bequeathed us and the demand for skilled labour that the economy is now generating. This requires direct interventions, such as the Employment Tax Incentive Bill. This was the ANC in 2007, not now.
Furthermore, our conference noted that programmes for the youth should seek primarily to give them training and experience to access formal employment in the formal economy. Therefore, we in the ANC said we would seek to develop a multipronged strategy to tackle youth unemployment, as the creation of decent work was one of the priorities of the ANC and its government.
What I want to drive home is simply that this is a programme that did not start today. It is a programme that branches of the ANC, the vast majority of our people, have spoken into and are making sure that we implement at the end of the day.
The Employment Tax Incentive Bill complements existing government programmes, such as the Expanded Public Works Programme, the Community Work Programme, skills development at colleges and further education and training issues, the Setas' programmes and the National Skills Fund. This Bill seeks to complement the initiatives that the government has already started.
What are the key issues that were raised during the public hearings? One is the issue of the Nedlac process. One of the matters I want to highlight is that the Nedlac process had the opportunity to interact regarding the original concept as proposed by the Minister of Finance in 2011. Out of that process further amendments were made to that proposal. A few of those amendments concerned the shift in the draft Bill from a subsidy to tax incentives. If you recall, earlier on we spoke of the youth wage subsidy.
Out of the Nedlac process and consultation there was a shift that sought to emphasise tax incentives for youth employment. We also changed the criteria in regard to age limits; minimum wage requirements; the possibility of the displacement of workers and therefore the penalties that must go with the proposed Bill, or interventions; and the inclusion of seasonal and part- time workers and how we would deal with them. All of these are the product of thorough consultation in the Nedlac process.
I am raising this because, all of a sudden, the DA has found it very, very convenient to speak on behalf of the National Union of Metalworkers of South Africa, Numsa. I am not sure what the commonality between it and Numsa is, but I am certain that Numsa remains an affiliate of Cosatu, and it espouses the positions of Cosatu. [Interjections.]
In regard to the displacement and substitution of workers, one of the things that we came across, as raised by various stakeholders and clarified by National Treasury in the public hearings, was that the current Bill, on its own, has sufficient internal mechanisms to deal with abuse of the tax incentives.
The issue of downward pressure on wages has also been looked into, in order to deal with the possibility of exploitation.
In addition, we realised that there was a key area which was less emphasised in the deliberations on this particular Bill. The focus was on youth tax incentives, but there was much less emphasis on their impact on the special economic zones. That is one area we need to focus on in order to industrialise our country, to make sure that the manufacturing sector is actually propelled, and to begin to respond to the issue of the balance of payments deficit.
After these serious deliberations, the committee finally agreed that the Bill should be presented to this House for consideration and that it should be passed so that implementation can take place as soon as yesterday! On behalf of the committee, I therefore want to put it to the House. The ANC supports the Employment Tax Incentive Bill. Thank you. [Applause.]