Theme: 4 Employment and Economic Growth Department of Labour Medium Term Budget Policy Statement (MTBPS) Public Hearings 18 November 2003 Theme: 4 Employment and Economic Growth Department of Labour

A. Background

1. Characteristics of the South African economy prior 1994 Dependence on primary export. Protectionism. Sharp decline. Dependence on unskilled labour.

1. Characteristics of the S.A. economy prior 1994 (cont …) Structural debt burden. Unsustainably high fiscal deficit. Macro-economic instability. Wealth concentration - minority.

2. Characteristics of the Labour Market Structural unemployment. Large supply of unskilled labour force. Short supply of skilled labour. Race and gender inequality. Inadequate protection of workers. High levels of adversarialism. Unprotected and violent strikes.

B. Economic Objectives of the RDP

Job creation. Elimination of poverty. Reduction of inequality. Overall growth of the country. Human Resource Development.

C. Tools to achieve RDP goals

Macro economic stability. Trade reform and improved access. Industrial policy to add domestic value. Increase global competitiveness. Attracting Foreign Direct Investment.

Broaden control of the economy. Promote growth of small businesses. Promote Skills Development. Promote Affirmative Action. Land Reform etc.

D. Post 1994

Macro-economic stability. Micro-economic reform strategy. Recovery from pre 1994 negative growth. 1995-2002: Net new jobs - 1.6 million [source- Towards a Ten Year Review: Presidency]

Skills Development Strategy. Employment Equity. Labour policy reform.

E. Achievements in the Labour Market

Industrial peace and stability. Social Dialogue. Marginal improvement equity.

Emerging training culture: Establishment of SETAs. Establishment of National Skills Fund. Measure to improve transition from school to work.

F. Persistent challenges in relation to employment

Structural unemployment persists Shift to tertiary / service – skilled labour required. Displacement of unskilled labour. Economy not growing at a rate that absorbs new entrants.

Structural unemployment persists (cont …) Young people graduating with degrees that did not prepare them for the labour market. Barriers to entry. Casualisation of worker.

G. Growth and Development Summit Agreements AIM Developing a shared vision for growth and development. Identifying key challenges. Partnership in action.

1. Addressing the investment challenge Government to increase infrastructure investment budget. Investing 5% of investible capital from relevant funds in productive activity. Mobilising investment in sectors with growth potential.

2. Employment creation Expanded Public Works Programme. Defending existing jobs – buy local campaign. Support for sectors that create jobs. Promotion of small and micro enterprises. Promotion of access to finance. Promotion of co-operatives. Promotion of broad-based BEE.

3. Advancing Equity & Skills Development Promoting Literacy Increasing the 2003 figure of 111 367 of those who already benefited. Learnerships Register at least 72 000 unemployed learners in learnerships by May 2004. Mobilising public sector learnerships.

3. Advancing Equity & Skills Development (cont…) Equity targets for learnerships (85% Black, 54% women and 4% persons with disabilities). Linking Skills Development with EPWP Modicum of training for EPWP participants. Strengthening of SETAs.

4. Local Action Various Provinces and local Governments are in discussion with social partners on implementation of GDS agreements at local level.