What is the Youth Wage Subsidy all about?

May 17, 2012

Violence flared up in Johannesburg this week as DA and Cosatu supporters clashed over the Youth Wage Subsidy. How will the Youth Wage Subsidy work and why is Cosatu opposed to it?

The DA marches for the youth

■Treasury estimates that the youth wage subsidy will help create 423 000 jobs for young South Africans.
■The DA has been calling for the implementation of the Youth Wage Subsidy for ten years.
■Both President Zuma and Finance Minister Gordhan have stated support for the youth wage subsidy in the State of the Nation Address and Budget Speech in 2010.
■Since then, it has been stalled in NEDLAC by COSATU. Business, government and FEDUSA (SA’s second largest union federation) are for the youth wage subsidy, COSATU is the only roadblock to its implementation.
■It will only cost government R5 billion over three years to implement the youth wage subsidy. The auditor general has found that government loses R30 billion to wasteful expenditure and corruption every year. If we cut down on this waste we can easily afford a R5 billion investment to create jobs for the youth.
■The subsidy will be paid over to complying businesses in the form of a tax credit, and will therefore be administered by the SARS.
■Employers who grow their labour force by employing people between the ages of 18 and 29 will be eligible to the wage subsidy.
■The youth wage subsidy will only be relevant to those employees who earn less than R60 000 per annum. (therefore less than R5000 per month)
■An employer will only be eligible for the subsidy for two years.
■The subsidy will cover 50% of a beneficiary’s wage up to R2000 per month, after that it will cover a smaller proportion up to R5000 per month.
■Projections indicate that it would cost the state R37 000 per new job created. This is much lower than other job-creation alternatives, like the expanded public works programme, which requires a R60 000 investment by government per job created.
■Singapore had huge success with the Youth Wage Subsidy, halving their unemployment between 2003 and 2007 partly due to the implementation of a youth wage subsidy.

Why is COSATU’s against the Youth Wage Subsidy?

1.COSATU’s argument is that the youth wage subsidy will create a two-tiered labour system, where the old get fired and the young simply get hired to replace them.
2.That this is essentially a hand-out to businesses and therefore cannot be justified.
3.That it will create distortions in the labour market.

What the DA says:

1.The wage subsidy proposal can be written in such a way to safeguard those who are already employed; it will only be provided to those businesses who expand their workforce. Therefore, the two-tiered labour force concern is unfounded.
2.Current labour legislation would also not allow for people to be fired simply to be replaced by younger people. That is illegal and cannot happen.
3.Businesses treasure their experienced employees, so they would not simply fire them to replace them with inexperienced workers. That makes no economic sense. This plan will safeguard those already employed and make it easier for businesses to expand their workforce to include young people who struggle to find work otherwise.
4.This is not a hand-out to businesses. It is a plan that will help business to employ more people. It will reward businesses for employing more people and will help the unemployed by getting more people into jobs.
5.It will not cause problematic distortions. Treasury has conducted an in-depth study of the proposal and its possible outcomes and has found that it will have an overwhelmingly positive impact, helping to create 423 000 new jobs in three years.

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Ouditeur-Generaal besoek Kouga

April 25, 2012

Tydens die Ouditeur-Generaal se besoek aan Kouga op die 22ste April 2012 was tydens die vergadering verskeie aanbiedinge aan die Stadsraad gemaak, onder andere ook deur SALGA, die Nasionale Tesourier se Departement en deur die Ouditeur-Generaal self.

“Die genoemde departemente het werklik sinvolle bydraes gelewer. Die bydrae van die Nasionale Tesourier wat onder andere ook die invorderingskoers van munisipale rade bespreek het, het my weereens laat besef dat die kernprobleem van Kouga Stadsraad se finansiële situasie kan daaraan toegeskryf word dat daar elke jaar vir ‘n onrealistiese inkomste begroot word”, se Nico Botha, DA Raadslid.

Daar kan met reg gevra word of dit wys is om vir ‘n invorderingkoers van 95% te begroot, indien die werklike invorderingskoers slegs 80% tot 85% is.

“Dit is goed om na ‘n hoë invorderingskoers te strewe maar dit is dom om onrealistiese teikens te stel. As die teiken met 10% gemis word beteken dit dat die stadsraad se inkomste met 50 miljoen rand oorskat word wat geweldige gevolglike probleme meebring” het Nico Botha gese.

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Mystery deepens around Hofmeyr’s removal as SIU head

April 21, 2012

At the Special Investigating Unit (SIU) briefing to the Parliament justice portfolio committee yesterday, acting SIU head Advocate Nomvula Mokhatla confirmed that she is serving as acting head of the SIU whilst still fulfilling her role as a Deputy National Director of Public Prosecutions.

There has been no head of the Special Investigating Unit since Willem Heath resigned last year.

This admission serves to compound the mystery around the removal of Willie Hofmeyr. The Democratic Alliance asked Adv Hofmeyr directly whether the president had given him reasons for his removal as SIU head.

He eventually replied that he had been spoken to and that it was discussed with him that he could not continue to do two jobs.

It is also unclear whether he was given a choice as to whether he would prefer to retain his post as SIU head or remain as the head of the Asset Forfeiture Unit (AFU).

The question needs to be asked why, in principle, is Advocate Nomvula Mokhatla allowed to act as SIU head and continue her job in Public Prosecutions, but Willie Hofmeyr was not permitted to do “two jobs”, despite his excellent performance in both.

In terms of the Special Investigating Units and Special Tribunals Act 74 of 1996, the president may remove the head of the SIU “if there are sound reasons for doing so”. The president has supplied no reasons whatsoever.

On 5 December 2011, DA Leader Helen Zille addressed a letter to the president requesting such reasons. The only response from him has been an acknowledgement of receipt.

The SIU fulfills a vital role in combatting corruption in South Africa.

The chaos that has been wrought in the recent months by Hofmeyer’s removal, the appointment and resignation of Judge Willem Heath, the appointment and removal of Advocate Nomgcobo Jiba and now Advocate Mokhatla’s appointment is unforgivable.

It is equally unacceptable that the President continues to ignore his legislative responsibilities and requests for reasons for his actions from the official opposition.

A severe cash crisis is also hampering the Special Investigating Unit (SIU)’s capacity to probe corruption, acting chief financial officer Garth Elliot said at the same briefing.

The unit had been forced to terminate the contracts of part-time staff, he said in Cape Town after a briefing to Parliament’s portfolio committee on justice.

At present, the SIU had to make do without R 175 million that is due to it from state entities, leaving R 307 million that was directly allocated from National Treasury for this financial year.

Why is the war against corruption being hampered in South Africa?

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Gobodo report to be released today

April 16, 2012

The Eastern Cape Local Government and Traditional Affairs MEC, Qoboshiyane will table the Gobodo preliminary Investigation report to the Kouga Local Municipality Council Chamber at Jeffreys Bay this morning.

MEC Mlibo Qoboshiyane will release the long awaited Gobodo report today

The tabling follows a preliminary investigation of a number of allegations investigated at the instruction of the MEC following a request to him from the Local Rate Payers Association.

The preliminary investigation was conducted through Section 106 of the Local Government: Municipal Systems Act, which empowers the Department conduct an investigations where there is reason to believe that there is maladministration, fraud, corruption or any form of malpractice.

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Public meetings for Kouga’s draft budget start tonight

April 10, 2012

Public meetings for residents input into the Kouga municipality’s draft budget for 2012/13 and draft IDP for 2012 – 2017 start tonight.

There will be two meeting tonight, both starting at 6 pm, at the Thornhill Hall (ward 7) and Sea Vista Hall (ward 12).

Tomorrow, the 11 April, also at 6 pm, meetings will be held at the Loerie Hall (Ward 7) and the Jeffreys Bay Newton Hall ( wards 3, 8 and 11, 14 and 15).

On Thursday, at 6 pm, meetings take place at the Kruisfontein Civic Centre (Wards 4 and 5) and Ramaphosa Hall, Patensie (Ward 10).

All residents are urged to attend the meetings as there are issues within the budget and IDP that need to be addressed.

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How the petrol price is calculated

April 5, 2012

In the last 10 years, South African petrol prices have increased, on average, by 11% per annum. This rate is unsustainable, especially given its disproportionate impact on the poor.

A litre of petrol cost R 3.77 in Gauteng in April 2001. Today, a litre of petrol in Gauteng costs a whopping R 11.94. If the trend continues, petrol would cost over R 20 per litre in about five years.

The Democratic Alliance welcomes the Department of Energy’s call for a review of the fuel pricing mechanism used by the Central Energy Fund (CEF).

Will South Africans be able to fill up their petrol tanks in future?

Government needs to take bold steps to bring down the fuel price, which is damaging South Africa’s prospects for growth and job creation.

The pricing formula of fuel must be amended to cushion South Africans from dramatic price increases.

The truth is that there is a great deal that government can do to reduce the petrol price. The dramatic 71 c per litre increase could have been much lower if government used a more sensitive formula to determine the price.

The petrol price formula currently works as follows:

The basic fuel price (BFP) + a number of additional margins, including government taxes and levies = Petrol Pump Price.

The formula makes sense in principle, but the DA proposes that each component be differently calibrated:

Firstly, the BFP formula needs to be reviewed to be less responsive to short-term fluctuations in the international oil price and the R/$ exchange rate. These fluctuations are often driven by market sentiment rather than by supply and demand fundamentals in the global oil market.

Currently, the Central Energy Fund, bases the BFP largely on the international price of oil and the value of the rand. As South Africa imports the vast majority of its oil, these dynamics are inescapable for the most part. The formula we use to determine petrol prices should be based on the long-term fundamentals in the global oil market.

Secondly, the petrol price formula should be reviewed. This should involve the radical reduction of government taxes and levies, currently consisting of customs and excise duties, a fuel levy, an equalisation fund levy and a road accident fund levy.

Petrol is a necessity for daily living. Government should not exploit this for the sake of unscrupulous tax gains. In the long run, higher taxes on petrol discourage the investment that is necessary to grow the economy and ultimately deliver tax revenue.

Petrol price increases affect all South Africans and will weigh down the economy. It means that people will have less disposable income and therefore less money with which to purchase goods and services.

This will in turn make businesses less profitable, meaning fewer people will be employed – leaving even less disposable income. It is not difficult to see how the current trajectory of fuel prices could have a crippling ripple effect on the economy.

Government should do all it can to cushion the blow in these cases. When the health of our economy is being threatened, no stone should be left unturned to protect the standard of living of the average South African.

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A better life for all

April 3, 2012

This was the promise that heralded the birth of democracy in South Africa – a better life for all. This promise meant different things to different people, yet there would have been few who disagreed that a good education would be the stepping stone to a better life for the children of the Nelson Mandela generation.

Over 300 000 people have migrated from the Eastern Cape to the Western Cape in the past 5 years - searching for a better life.

Sadly, a better education for all has not transpired in the Eastern Cape. In fact the poor quality education offered to pupils in the province has led to a migration of pupils to the Western Cape in search of a better life and a better education than what is on offer in the Eastern Cape.

According to Stats SA, 329 714 people have migrated from the Eastern Cape between 2006 and 2011 – more than have migrated away from any other province.

The reasons for the trend are not difficult to understand. The quality of life in the Eastern Cape under an ANC administration is seriously compromised by poor service delivery and equally poor governance. No one area typifies this better than the state of the education in that province.

According to Helen Zille, the leader of the Democratic Alliance, 44% of new school registrations tracked in Western Cape schools this year, from Grade 1 to Grade 12, are from the Eastern Cape.

“We have warmly welcomed these pupils to the Western Cape, who otherwise would have been tossed onto the smouldering ruins of Eastern Cape education, where pupils still study in some 394 mud schools or under trees, where the Education Department spent only a paltry 28 % of its infrastructure budget; where the Department cannot work out how many ghost schools it has, let alone ghost teachers; where learner outcomes are worse than in any other province; and where teachers in the biggest teacher union spent the first six weeks of the new school year on strike.

The horrifying truth is that an average child in the Eastern Cape today is likely to get a worse education than she would in parts of the war ravaged Democratic Republic of Congo”, said Zille in a speech made at the DA Provincial Congress in Grahamstown.

In almost every other area, the Western Cape also outperforms the Eastern Cape. It truly offers a better quality of life, more opportunity and an improved chance of any one person being able to realise their potential.

This, no doubt, is the source of massive embarrassment to the ANC. Apart from the obvious fact that the Western Cape is the only province where it is not in power, the Eastern Cape is the ANC’s political heartland. And its inability to deliver the most basic services to Eastern Cape citizens effectively constitutes a direct assault on one of its core constituencies.

The time has come for the people of the Eastern Cape to no longer vote with their feet and move to the Western Cape. The time has come for the people of the Eastern Cape to vote at the ballot box and begin the 2nd Liberation that has already occurred in the Western Cape. This is the path to economic liberation and a better life for all.

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We can beat poverty and unemployment in the Eastern Cape

April 2, 2012

For the hundreds of thousands of learners who pass through the Eastern Cape education system, their chances of finding a job are severely limited even before they leave school.

What is to be done?

Fixing the education system clearly has a critical role to play in addressing the inter-related challenges of poverty and unemployment in the Eastern Cape. Some of the solutions are:

New legislation that will make teachers’ right to strike subject to certain limitations; introducing a special allowance to supplement the salaries of teachers who possess scarce subject knowledge; introducing minimum qualifications for school principals; providing additional training for teachers to improve their literacy and numeracy teaching skills.

Danny Benzon, Elza Van Lingen and Fred Campher at the DA Provincial Congress

The Eastern Cape boasts a number of economic assets that, with the right policy changes, have the potential to put this province on a high growth path.

First, with no fewer than four major universities – Rhodes University, Nelson Mandela Metropolitan University, Walter Sisulu University, and the University of Fort Hare – as well as numerous other training and vocational colleges, the Eastern Cape has the intellectual assets it needs to become a regional research and development hub, and a key player in our country’s knowledge economy.

Second, the province is the centre of our country’s motor industry. This is a major asset. Both Volkswagen South Africa and Ford Motor Company of Southern Africa have manufacturing plants in the Eastern Cape, while General Motors and Mercedes Benz South Africa have assembly plants here.

Third is the province’s rich environmental endowment. Blessed with a significant portion of South Africa’s farm land, the Eastern Cape is the centre of the country’s livestock production, with specific emphasis on cattle, sheep and goats. The Langkloof Valley and the Alexandria-Grahamstown area, moreover, specialise in fruit farming, and tea and coffee cultivation, respectively.

Fourthly, for the tourism sector, it means creating an environment in which it is simpler and easier to do business. Policy priorities on this front include: reducing the regulatory barriers faced by tourism operators; investing in world class transport and communications infrastructure; and ensuring the safety and security of both local and international visitors.

The Eastern Cape faces seemingly intractable challenges. Poverty is widespread. Too many people go hungry. Unemployment is unacceptably high. However, the province also features a number of notable economic assets that, combined with intelligent policy choices, could unlock rapid economic growth and lay the foundations for prosperity for all.

To make this happen, however, the provincial administration will require a radical transformation. Corrupt officials and so-called ‘cadres’ need to be sacked. Tender compliance and monitoring will have to be significantly beefed-up so that precious resources are not wasted. A graduate recruitment programme needs to be put in place to attract the best young talent so we can begin to build a world-class public service.

The ANC will tell you that, to tackle poverty and unemployment, we need to dismantle the Constitution. The DA says: “we don’t need a new Constitution, we need a new government!”

Wilmot James
Federal Chairperson
Democratic Alliance

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Eastern Cape must lead 2nd Liberation Struggle

March 31, 2012

Just as the liberation to free South Africa from the shackles of apartheid was led from the Eastern Cape by great men like Nelson Mandela, so must the people of the Eastern Cape lead the way to economic liberation said DA leader Helen Zille in Grahamstown today.

Helen Zille is at the Eastern Cape congress of the DA in Grahamstown today

Addressing the provincial congress of the Democratic Alliance in the Eastern Cape this morning, Zille said that across Africa the second Liberation movement had led to the freedom from the so called liberators, who fought and won against colonialism.

“It is only in Southern Africa where the first liberators still hold absolute power”, said Zille. “Countries like Zimbabwe, Angola, Mozambique and South Africa are now weighed down under the shackles of the original liberators”.

“Many of the voters still believe that a better life for all still awaits them. That explains why the ANC won with such huge majorities in the recent by elections in the Nelson Mandela Bay Metro.

Voters are putting loyalty ahead of democracy. This will ensure a failed democracy and therefore a failed state”, added Zille.

“The 2nd Liberation now has to be achieved through the ballot box and will in turn lead to the 3rd Liberation which is freedom from corruption, cronyism, poverty and unemployment.

The 3rd Liberation must be the goal of the DA and it must be spearheaded by the people of the Eastern Cape. The Eastern Cape must be the epicentre of this movement and must be led by the DA”.

“There is no easy walk to freedom but we owe it to the legacy of Nelson Mandela”, concluded Zille.
The provincial congress of the DA ends today in Grahamstown.

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Lack of engineers hampers service delivery in Eastern Cape

March 30, 2012

Nine municipalities in the Eastern Province do not have Technical Directors or City Engineers in their service.

This represents one fifth of the 45 municipalities in the province.

A sewage upgrade in Jeffreys Bay is long overdue.

This problem is contrary to the government commitment to emphasise, prioritise, enhance and develop infrastructure delivery and to be a catalyst for growth of the real economy throughout the country this financial year.

Municipalities are unattractive work places for aspiring engineers.

Generally, engineers are not keen to work for municipalities due to working conditions and remuneration packages which are more attractive in the private sector.

The Democratic Alliance (DA) will be asking the MEC for Local Government, Mlibo Qoboshiyane, that his department do a thorough analyses of the engineering situation in our municipalities and whether the infrastructural plans for the next Medium Term Expenditure Framework-period (MTEF) can be undertaken with the current engineering strength in the Eastern Cape municipalities.

Included in this survey I wish to ascertain what steps have and are being taken to attract graduate and other professional engineers to municipalities.

The following municipalities are without engineering expertise: Nelson Mandela Metro, Cacadu District Municipality, Sundays River Valley, Blue Crane Route, Kouga, Ikwezi, Tsolwana, King Sabata Dalindyebo and Ntabankulu.

Kouga has appointed Danie Rautenbach as acting Director of Technical Services.

Furthermore, with severe problems with water supply and dysfunctional sanitation services in municipalities, the lack of adequate engineers is having a detrimental effect on the quality and efficiency of these and other related services.

This is a critical problem that needs immediate attention.

Failure to adequately address this shortage of engineers will have severe consequences for current and future economic growth, job creation and service delivery in the province for the foreseeable future.

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