Economic Development Minister Patel has said that the Youth Wage Subsidy programme would be sped up.

The Youth Wage Subsidy policy was formally announced by President Zuma on 11 February 2010. The South African government intends to allocate R 5 billion over the medium term to the youth subsidy programme, which will see employers being compensated for taking on young employees.

While this is targeted at lowering labour costs of training, thus boosting demand, the government also aims to attract the youth into the labour market. The work experience and on-the-job training gained during the period of subsidised work should improve the long term employability of young workers.

The government will subsidise a portion of youth wages for up to two years, ensuring that input costs are lowered without significantly affecting wages.

The programme targets employees aged 18-29 years, with personal income tax thresholds below R 59 750. The National Treasury estimates that the wage subsidy will create jobs for 423 000 young people.

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