Youth wage subsidy ‘an incentive scheme’
The youth wage subsidy to companies has been replaced by a youth employment incentive scheme, which means companies employing young people will pay less tax.
Finance Minister Pravin Gordhan told journalists ahead of his Budget speech in Parliament this morning that the keyword was “cost-sharing” between government and the private sector when it came to getting young people to work.
The agreement on the youth employment incentive package is set to be signed by government, business and labour in the negotiating forum Nedlac soon, according to Gordhan.
The incentive package was, according to the finance minister, “a key result of the good work (over) the past nine months”.
In 2010 he announced R5 billion would be set aside as a youth wage subsidy, but labour union federation Cosatu said this was unacceptable as this would result in older workers losing their jobs because young workers would be cheaper to employ.
“The tax incentive takes into consideration Cosatu’s concerns,” Gordhan said.
According to the Budget Review document tabled by Gordhan in the National Assembly today, this tax incentive complements the training programmes in place already.
The incentive would be “aimed at encouraging firms to employ young work seekers” to “help people enter the labour market, gain valuable experience and access career opportunities”.