23 February 2011
Finance Minister Pravin Gordhan has announced the details of several initiatives and proposals to boost job creation in South Africa, including a jobs fund, increasing funding for small businesses, and spending on skills, rural development and industrial support.
Presenting his Budget Speech in Parliament in Cape Town on Wednesday, Gordhan said the R9-billion jobs fund recently announced by President Jacob Zuma would co-finance innovative public and private-sector employment projects over the next three years.
Added to this, R20-billion in tax incentives have been renewed for manufacturing investments, with a focus on investments that have job-creation potential. Small enterprise development initiatives will be strengthened, including a focus on employment creation activities by the National Youth Development Agency.
Initiatives are also under way to promote rural employment, and provide stepped-up support for agricultural producers, and funding has been allocated for renewable energy, environmental protection and “green” economy initiatives.
Gordhan also detailed further initiatives to boost skills and therefore improve employment.
Further education and training colleges have been allocated over R14-billion for the period ahead, and student financial assistance will be stepped up, while over R20-billion has been set aside for the Sector Education and Training Authorities (Setas) and R5-billion for the National Skills Fund.
Gordhan said the Expanded Public Works Programme (EPWP) would be allocated R73-billion over the next three years for job-creation initiatives that would include community-based projects, environmental and social programmes, and maintenance of roads and infrastructure.
Added to this, investment would be stepped up in housing and residential infrastructure and services.
Small business development
Additional funding would also be allocated to small businesses, while the South African Micro-finance Apex Fund (Samaf) would get R282-million over three years.
A total of R55-million has been allocated to Khula Enterprises Finance, the government’s small business funding agency, to pilot a new approach to small business lending, in which finance will be disbursed directly to business owners, rather than through banks and finance intermediaries.
Gordhan noted that businesses that employed fewer than 50 workers accounted for 68 percent of South Africa’s private sector employment.
In a briefing held this morning ahead the Budget Speech, Gordhan conceded that the government had come up short in providing adequate support for this sector, adding that promoting entrepreneurship was vital to the country’s future.
Business support and incentives
State support to businesses includes R600-million for enterprise investment incentives, R735-million for the Competition Commission and other economic regulatory agencies, R250-million for the Industrial Development Corporation to support agro-processing businesses, and R120-million for the national tooling initiative.
The National Treasury has allocated R10-billion to be spent on Industrial Policy Action Plan investment promotion over the next three years, including the automotive production and development programme, clothing and textiles production incentives, the film and television production incentive, and support for small manufacturing and tourism enterprises.
“An additional R2.2-billion will be allocated to land reform and agricultural development programmes that are focused on rural job creation and poverty reduction, while expanding agricultural production and improving food security,” Gordhan said.
This includes a further R400-million for the comprehensive agricultural support programme and the land care programme grant, and funding to enable a further 5 000 recruits into the National Rural Youth Services corps.
Including provincial allocations for agricultural support, a total of R19-billion will be spent on rural development and agriculture in 2011/12, rising to R21-billion in 2013/14, he said.
Funding amounting to R800-million has been set aside over the next three years for “green economy” initiatives, said Gordhan.
A total of R2.2-billion would be allocated to environmental employment programmes over the medium term period.