Promises of job creation, fighting poverty, unemployment and
government improving its service delivery mechanisms took centre
stage in Finance Minister Pravin Gordhan's Budget speech.
While government celebrated the fact that it has replaced the
one million jobs lost since the low point of the recession in 2009,
Gordhan said unemployment and inequality remain the biggest risks
to growth and prosperity in post-apartheid South Africa.
Government has spent R100 billion on employment programmes over
the past five years, funding more than four million job
Yesterday Gordhan promised six million job opportunities over
the next five years, reiterating President Jacob Zuma's promise
at the launch of the ANC election manifesto earlier this year.
Dave Mohr, chief investment strategist for Old Mutual Wealth,
said that in the past many of these promises had not translated
into reality. Job creation depends on the way the economy performs
and job seekers should not put all their hopes on these
Carolyn Chambers, head of international executive services at
KPMG, said the minister did not give a lot of detail on exactly
where the jobs would come from.
It seems the calculation method used for the Youth Employment
Tax Incentive is aimed at job creation in the R2 000-R4 000 income
"The incentive seems to encourage companies to hire more
people in this bracket rather than hiring less people in the income
bracket R5 000 and up," she said.
The attempt to shift towards a more labour-intensive growth path
is supported by the youth employment tax incentive, which came into
effect in January.
In the first month, 56 000 beneficiaries were recorded. Gordhan
said for rapid progress in creating jobs and reducing poverty, the
economy must grow at 5% a year or more.
He admitted to weak governance and corruption, as well as
instances where service delivery has faltered. He gave the
assurance government has heard the plea of the protesters and
undertook to improve service delivery. "The community protests
are a sign that people want government to quicken the pace of
delivery of housing, water and sanitation."
Gordhan said more must be done to improve accountability, and
the high indebtedness of workers must be addressed.
This article first appeared in The Citizen, 27 February.
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