Democratic Alliance (Cape Town)

13 January 2014

South Africa: Youth Wage Subsidy - DA Urges Employers to Claim Tax Breaks Despite Threats in ANC Manifesto

Photo: Westcapenews
ANC supporters at a rally (file photo).

press release

Proposed changes to the Youth Wage Subsidy in the ANC manifesto undermine the legislative process and will put youth jobs at risk by creating confusion in the minds of employers.

The DA calls on all employers to utilise the tax breaks for youth jobs in the Employment Tax Incentive Act, and not to be put off by the ANC's threats to compromise the legislation.

In its election manifesto for the 2014 election the ANC claim that they will "consult all relevant stakeholders in implementation" of the Act and will introduce "new regulations to ensure there is no displacement of unsubsidised workers to avoid a multi-tiered labour market".

These proposals are deeply problematic. The legislation has already been in place for two weeks and employers are free to start reducing their tax payable in exchange for new jobs created for young people.

Suggesting that there is some implementation that has not yet started is disingenuous.

Furthermore, the law already contains strong penalties for displacement; so proposing additional regulations simply creates confusion in the minds of employers who could be creating much-needed jobs for young people.

This move by the ANC will increase uncertainty around the Youth Wage Subsidy that has already been significantly watered-down by the ANC in Parliament. It shows that the ANC is more interested in pandering to Cosatu than it is in creating jobs for young South Africans.

The DA will continue to fight for a real strong Youth Wage Subsidy and urges employers not to be put off by threats in the ANC manifesto.

Tim Harris, DA Deputy Spokesperson on Finance

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