Mangosuthu Buthelezi’s Online Letter
Dear friends and fellow South Africans,
South Africa has an unemployment rate of 25%. That is an intimidating statistic for anyone trying to find work. But for someone born after 1987, the odds decrease; because in the population of under 25, unemployment stands at 49%. Youth unemployment is a national crisis.
Thus, when the ANC prepared its centennial programme for 2012, it elected Youth Month as the time to convince South Africa that the ANC has its "Focus on Youth Skills Development". Toeing the line, the Premier of KwaZulu Natal used the Social Development Budget Debate as an opportunity to flaunt Government’s successes in fighting youth unemployment. It was a hard task, though, for there is little to brag about.
It called to mind the State of the Nation speeches, which are becoming more vague with each passing year in terms of the actual state of things. I pointed out this year how the President avoided mentioning that 5 million lives have been lost to HIV/Aids, by saying nothing more than "we are doing well with regards to treatment" but "general prevention efforts must also be accelerated". That hardly summarises the status of the pandemic.
Likewise some empty slogans about support programmes for unemployed youth in KwaZulu Natal ring hollow when the Government continually compromises its own job creation policies for political expediency.
When South Africa’s labour legislation was being forged, I sounded warnings both in Cabinet and in Parliament that it gave excessive power to trade unions and imposed rigidity on the labour market to the detriment of employment growth. Then President Thabo Mbeki took my point and appointed Deputy President Jacob Zuma to drive a revision of the Labour Relations Act.
Yet the moment the trade unions opposed it, the initiative stalled.
I was fascinated yesterday by an analysis on Times Live by Mr Brendan Boyle, who wrote, "The first parliament elected with Nelson Mandela in 1994 made a genuine effort to write good law. Mbeki’s government was more inclined to reinterpret the spirit of the constitution to suit its own plans, but tried to work within boundaries that would allow its members to sleep. Now the instruction comes down from Luthuli House. and the job of the ANC MPs is to make it happen."
Unfortunately, politics is driving our Government’s economic policy.
Politics is driving our labour policy. And politics is firmly in the driving seat when it comes to policies on employment generation.
Government’s lauded Expanded Public Works Programme created 2.4 million jobs. But they lasted less than 50 days. Was there any transfer of marketable skills? Between 2009 and 2010, we lost about 1.17 million jobs, rather than seeing the half a million new jobs the President committed himself to delivering.
Then, in 2010, the President announced the implementation of the Youth Wage Subsidy. Finance Minister Pravin Gordhan was delighted and Treasury estimated the programme would subsidise 423 000 workers between the ages of 18 and 29. Business supported it and South Africa’s second largest union federation, FEDUSA, anticipated its success.
The idea was that any business employing a young South African would receive a subsidy for two years, in the form of a tax credit. This would encourage the private sector to prioritise young employees and so begin to address youth unemployment.
The programme would be administered by the South African Revenue Service, which is cause for many sceptics to breathe a sigh of relief because, unlike many Government departments, SARS is known for efficiency and not known for corruption.
A Wage Subsidy is also not without precedent. It has been tried in Singapore, the United States and Belgium, with remarkable success.
Why then, with so much support, was the Youth Wage Subsidy not implemented?
It is certainly not a matter of funds. Last year President Zuma announced R29 billion in funds and incentives to get the private sector to create more jobs, while the Youth Wage Subsidy would cost only R5 billion over three years. That is a great deal cheaper than other employment generation programmes Government has attempted.
The President of the National Union of Metalworkers of South Africa (NUMSA) recently pointed out that "our ANC Government has provided billions since 1998 through the Skills Development Levies to companies to absorb and train young people." Of course, the levy is exacted from business, it is not a gift from "our ANC Government" to business.
But it raises an interesting point: the Youth Wage Subsidy could be funded by the National Skills Fund, which receives 20% of the Skills Development Levy to train specific groups, such as the unemployed. The National Skills Fund is used by SETAs. But are SETAs successfully addressing unemployment?
It is difficult to ignore the fact that organised labour has a vested interest in perpetuating SETAs.
It is COSATU’s adamant rejection of the Youth Wage Subsidy that has stopped "our ANC Government" from pursuing it. Again President Jacob Zuma and the ANC are bowing to pressure from their alliance partner.
The President has often been accused of speaking from both sides of his mouth, saying whatever will please a specific audience. The ANC is more concerned about winning popularity than solving problems. Unfortunately, if it works, they will be given more and more opportunities to avoid solving problems, while the problems grow and grow.
The wise path would be to address COSATU’s objections to the Youth Wage Subsidy and try to bring them on board.
The difficulty is the kind of rhetoric employed in this debate. NUMSA, for instance, says that youth unemployment has been caused by "unpatriotic employers" who "have not trained young people in numbers" and who will "use the subsidy to line their pockets".
Then there is the kind of emotional response offered by the DA that employers value their older employees and would never replace them with young workers, and even if they would, labour legislation won’t allow it.
"That is illegal and cannot happen," says the DA Youth. Yet it does happen, in many industries. In reality, despite labour legislation, not all workers are treated fairly.
The IFP supports the Youth Wage Subsidy. It is worth tackling the objections and embracing the support, regardless of where they come from, because in the end it’s for the benefit of the poor.
It is a pity the debate on the Youth Wage Subsidy has been replaced by a cat fight between COSATU and the DA. It seems both are so suspicious of the others’ motives that neither will debate the point. If my house were burning down, I would not stop and ask who brought the bucket of water before deciding whether I would use it to douse the flames.
The IFP agrees that other simultaneous interventions are needed, such as the reopening of training colleges that the ANC shut down, a revisiting of our rigid labour legislation and accelerating economic growth so that we are not just redistributing poverty. But the Youth Wage Subsidy is a good start.
If the ANC is sincere in wanting to "Focus on Youth Skills Development" during this Youth Month, and for as long as it takes to resolve the national crisis of youth unemployment, it needs to step up and truly lead.
Yours in the service of the nation,
Prince Mangosuthu Buthelezi MP