Financial News Blog: Budgeting for Jobs : Northwood Group

Posted on | June 4, 2011 | No Comments

The 2011 budget speech offered several welcome surprises for South Africans currently concerned or affected by the nation?s chronic unemployment situation ? referred to by many experts as a crisis.

A society with too many people and too few opportunities cannot hope to achieve stability and prosperity ? two key goals of South African government policy that critics say it has had mixed results in achieving.

In its defence, the government points to the legacy of Apartheid as well as the recent financial crisis that has seen stubbornly high levels of unemployment prevail around the globe. Even in countries like the US and EU member states, nations usually noted for employment levels that exceed 90%, the effects of the recession are predicted to persist until the middle of this decade.

In the midst of this global unemployment crisis, what makes South Africa particularly worrisome? Experts point to rampant unemployment, far higher than that of developed nations, and youth unemployment in particular that is close to exceeding 50%. With half the country?s young people out of work and unable to contribute, the fiscal and economic picture of tomorrow looks increasingly dim ? a fact not lost on the South African government.

In his budget speech, Finance Minister Pravin Gordhan announced several measures to address the nation?s unemployment crisis. With R150 Billion earmarked for job creation in 2011 alone, the government plans to create 4 million jobs in the next few years.? Citing the 1 million jobs created by the extended public works programme since April 2009, the Minister announced the continuation and expansion of this initiative.? Other programmes include a youth job subsidy that is designed to encourage employers to take an additional young staff and a R9 Billion challenge fund that seeks to co-finance job creation ventures with private sector partners.

Critics have raised several objections to these planned measures, with trade unions opposing the youth wage subsidy and economists pointing out that the jobs created by the public works programme are not sustainable in the long term ? lasting only 3 to 4 months on average. Whether the state or its critics are correct, the ultimate test will be the nation?s unemployment rate.

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Source: http://www.northwood.co.za/blog/2011/06/financial-news-blog-budgeting-for-jobs/?utm_source=rss&utm_medium=rss&utm_campaign=financial-news-blog-budgeting-for-jobs

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