Hon Deputy Speaker, it goes without saying that unemployment is our most pressing crisis. I am sorry the hon Trevor Manuel is not here because he would have us believe that Limpopo province has the lowest unemployment rate in the country. This is absurd. The plain truth is that hopelessness is so entrenched in that province that for every person looking for work, there are two people that have given up looking. When these hopeless people are included in the unemployment measure, you can see the truth that unemployment among the provinces is the second highest in Limpopo.
One can also see that the Western Cape is the province of hope with, by far, the lowest level of unemployment and hopelessness. [Interjections.] This is what I mean - the Gauteng labour force is twice the size of the Western Cape's, but there are 10 times more job seekers who have given up looking for work in Gauteng than there are in the Western Cape. [Interjections.] Statistics SA's latest figures show that unemployment increased from 29% to 30% in Gauteng, while it decreased from 27% to 25% in the Western Cape.
But, hon Deputy Speaker, this is a good day for young unemployed South Africans across the country. This is because three years, eight months and 21 days ago, the President stood at this podium and announced a youth wage subsidy, the intervention to help reduce the cost of hiring young people, who make up 70% of the unemployed.
The policy document that Treasury published estimated that 423 000 young people would benefit over three years. The policy was supported by economists, trade unions and all of the parties in this House. Unfortunately, while it had this broad support, Cosatu opposed it and refused to debate it at Nedlac. So, the policy remained stuck at Nedlac for three years. Whilst it was stuck at Nedlac, 218 000 young job seekers joined the ranks of the unemployed. That's the price of Cosatu's delay. Of course, the DA did not take this lying down. We were convinced that a youth wage subsidy could help thousands of young South Africans get much- needed work experience. So, in May 2012 we led a march of 3 000 young people to Cosatu's head office to stand up to the trade union federation and protest their opposition to the policy.
Also, in the province of the Western Cape we moved quickly to pilot a youth wage subsidy in that province. Despite our very limited budget for such interventions, we have so far subsidised 4 000 young people and there is no evidence that a single one of them has displaced an existing worker. I must take this moment to thank the Development Bank of Southern Africa for their contribution of R67 million from the Jobs Fund to help us expand this scheme.
Now, obviously frustrated with this filibustering from Cosatu, Treasury simply tabled a Bill to implement a youth wage subsidy in Parliament earlier this year. This is not a good thing for Nedlac. According to section 5 of the National Economic Development and Labour Council Act, the Nedlac Act, it this institution that is meant to consider all significant changes to social and economic policy before they are introduced in Parliament or implemented. Normally, when Nedlac has attempted to reach consensus, they publish a report, and that clears the way for policy to be legislated, but here Treasury simply side-stepped Nedlac! They brought a Bill straight to Parliament. Is this the final nail in the coffin for Nedlac? It is an important institution. It is meant to work towards consensus between business, labour, government and civil society, but it is now fundamentally compromised by the crippling divisions within the tripartite alliance! So this is a bad day for Nedlac, hon Deputy Speaker.
But it is a good day for young people. That said, it could have been a much, much better day. This is because the version of the subsidy before this House is significantly watered down from the version tabled in the 2011 policy. It provides a weaker incentive and it supports only half the number of young workers the original version would have supported. In fact, if this version works as it is predicted to work over the three years, it will only be able to absorb those young workers who have joined the labour force while the Bill has been delayed at Nedlac. So net job creation will, in effect, be zero.
You can also see that the Bill has been watered down in the cost to the fiscus. The first version would have cost R5 billion over three years. This version will cost somewhere between R1,3 billion and R3 billion. This is because key changes have been made to the incentive.
Existing young workers will no longer be subsidised. If you are worried about substitution, those are the people you should be most worried about. Some new jobs created for entry-level and part-time workers in sectors without wage determinations will no longer be subsidised. So some of the most vulnerable people looking for work will not be eligible for the subsidy. The mechanism to allow a cash pay-out for firms unable to claim their tax back because of the limit and the size of their tax bill has been suspended. A sunset clause has been inserted which, halfway through the next term of Parliament triggers self-destruct of the Bill, taking away Parliament's power to decide on the continued existence of the Bill.
And now the Minister is able to introduce all sorts of conditions that beneficiaries would need to meet in order to be eligible for the subsidy. However, Treasury's own policy document claimed that such conditions would discourage take-up of the subsidy and reduce the number of unemployed young people gaining vital work experience. Why would we want to do that? We as the DA proposed fixes for all of these problems in committee, and every single one was outvoted by the ANC in committee.
It is important to note that they were with the DA for a while, on the proposal to remove the sunset clause, until our legal advisor pointed out that this would delay the Bill. Suddenly the ANC members had a change of heart and decided that they could live with the sunset clause. This is law- making at its most expedient.
After three years of delays caused by an ideological standoff in the tripartite alliance, young South Africans are finally getting their youth wage subsidy, and we will be supporting the eventual introduction of it. This is not because it is a silver bullet for unemployment, but because it represents some much-needed hope for young unemployed South Africans. We strongly condemn, however, the way it has been watered down, to the detriment of hundreds of thousands of young people.
It will be interesting to see if the more than 30 members of Cosatu on this side of the House object, considering that their federation told the Portfolio Committee on Finance that they were committed to resisting the passing and implementation of the Bill. Or to see what the members of the SACP will do, considering that the hon Manamela rejected the Bill and said that he was firmly opposed to it. Perhaps that is why he is hiding in his office! Or to see whether Minister Obed Bapela will object, considering that he told this House that the money for the youth wage subsidy would now be funding the Youth Employment Accord, which deliberately does not mention the youth wage subsidy. Perhaps the hon Minister is hiding with the hon Manamela!
That is because the real choice today is not between a youth wage subsidy and something else. It is a choice that South Africans will make at the ballot box next year when they choose between the ANC, a party that holds up hundreds of thousands of jobs for young people, and the DA, a party that does what it says it will and puts young unemployed South Africans first. [Applause.]