According to the Quarterly Labour Force Survey for the third quarter of 2022, young people aged between 15-24 years and 25-34 years recorded the highest unemployment rates of 59.6% and 40.5% respectively.
In an effort to address the challenge of youth unemployment, government has decided to expand the Employment Tax Incentive (ETI) to encourage businesses to hire more young people in large numbers.
This was announced on Thursday when President Cyril Ramaphosa delivered the State of the Nation Address (SONA)
The president says that the Tax Incentive will reduce an employer’s cost of hiring young people through a cost-sharing mechanism with government, while leaving the wage the employee receives unaffected.
Initially the incentive came into effect in January 2014, which allowed employers to claim the ETI and reduce the amount of Pay-As-You-Earn (PAYE) tax payable by the amount of the total ETI calculated in respect of all qualifying employees.
Last year, I announced that we would be seeking to reduce red tape so that we can rid our country of the unnecessary bureaucracy that often holds us back. The red tape reduction team in the Presidency under Mr Sipho Nkosi has been working with various departments to make it easier to do business.
Other measures government mentioned to mitigate youth unemployment include the Presidential Employment Stimulus and the revitalised National Youth Service which will create a further 36 000 opportunities through non-profit and community-based organisations.
The President noted that these programmes have already provided work and livelihood opportunities to more than 1 million people.
Ramaphosa says that between the third quarters of 2021 and 2022, around 1.5 million new jobs were created in the economy.
Last week, a new cohort of 150 000 school assistants started work at more than 22 000 schools, offering dignity, hope and vital work experience to young people who were unemployed.
Furthermore, the President also highlighted that the Social Employment Fund is also recruiting 50 000 participants in its next phase to undertake work for the common good.
Giving an update on the Department of Home Affairs project to digitise more than 340 million paper-based civic records, Ramaphosa said that the department has already appointed the first cohort of 10 000 unemployed young people.
The president further emphasized the need for businesses, departments, and SOEs to remove the requirement for work experience for young people seeking entry-level positions.
