DA wants tax bill to be top priority
CAPE TOWN — Considerable obstacles stand in the way of Parliament’s adopting the Employment Tax Incentive Bill, which was urgently needed to address the crisis of youth unemployment, the Democratic Alliance (DA) said yesterday.
DA finance spokesman Tim Harris said the party was concerned that Finance Minister Pravin Gordhan might not succeed in getting the bill onto the statute books. There was no more pressing issue in SA today than youth unemployment, and therefore the bill had to be prioritised. “Our unemployed youth cannot wait until after the election,” he said.
The bill faces stiff opposition from the Congress of South African Trade Unions (Cosatu) and its affiliates, which will be expressed in Parliament today, during public hearings on the proposals by the standing committee on finance. In addition to numerous written submissions received, the committee will hear oral presentations, mainly from trade unions and union federations.
Among the obstacles highlighted by the DA is the fact that the Treasury’s policy document of 2010 for a youth wage subsidy has not yet been adopted at the National Economic Development and Labour Council (Nedlac).
Also, the ruling African National Congress (ANC) has not included the bill among the seven of the 73 bills pending or currently before the National Assembly or the National Council of Provinces which it considers are “necessary” for next year’s election.
In terms of the bill — released by the Treasury last month — a 50% subsidy will be provided for first-time workers between the ages of 19 and 29 earning between R2,000 and R6,000 a month. The subsidy would be deducted from a company’s total PAYE liability.
The Treasury has proposed that the incentive take effect from January 1 and run until the end of 2016, but would be back-dated to October 1.
The DA has criticised the bill for excluding young workers hired in entry-level jobs in sectors without a minimum wage and for not including existing young workers. The bill replaces the youth wage subsidy proposal first made by President Jacob Zuma in his opening address to Parliament in 2010, a plan which was stalled because of Cosatu’s rejection of it on the grounds that it risked creating a two-tier labour system and prejudicing older workers.
Mr Harris said the DA would push for the bill to be prioritised at this week’s meeting of Parliament’s programming committee and would seek an urgent meeting with Nedlac’s executive director, Alistair Smith, to learn about the status of discussions. The party also plans to question Economic Development Minister Ebrahim Patel and Deputy Minister in the Presidency Obed Bapela on how the bill fitted in with the Youth Employment Accord.
DA spokesman on economic development Kenneth Mubu asked how the Treasury could proceed if all constituencies had not approved the bill, as required by the accord. He said more than 4,000 young people had been through the Western Cape’s work and skills programme since 2009.