Business Unity South Africa (BUSA) said it is encouraged by the reduction in South Africa’s joblessness which was revealed in the figures for the third quarter of 2013. But the business lobby group warned that the domination of the public sector in these job creation numbers is not sustainable.
Figures released yesterday by Statistics South Africa showed the country’s unemployment declining slightly from 25.6% to 24.7%. This was a surprise to many observers who were concerned that joblessness might rise on the back of weak economic performance. Economic activity has weakened this year which forced watchers to reduce the 2013 GDP growth forecast to about 2%.
BUSA said the latest reduction in unemployment is encouraging and better than expected, given sluggish economic growth. “BUSA hopes that these trends will continue, as the best form of empowerment come when more work is available, and not just white collar workers”.
BUSA added that “The issues of youth unemployment and job creation for low-skilled workers remain critical challenges, which is also why BUSA supports the Employment Tax Incentive legislation now before Parliament aimed at helping to redress this imbalance.”
“Although one of the biggest single growth factors in the latest employment figures is in the public sector, BUSA believes that, if the fiscal discipline in the latest MTBPS is enforced, job creation by government is not sustainable in the long term”.
Instead, the National Development Plan (NDP) confirms that the bulk of job creation will need to come from the private sector.
BUSA said it is interesting to note that about 54% of the new jobs were temporary in nature, reflecting continued uncertainty about the economic revival. “This also emphasises the demand for temporary work and why it should not be effectively banned in terms of the current labour relations amendment before Parliament”.
“BUSA is nonetheless heartened by the latest employment trends and hopes that they can be sustained in the period ahead as part of moving towards the ambitious job creation goals of the NDP, to which South Africa is now committed”.