State of the Nation: R29bn over three years to finance job-creation

The government will make R9-billion available for job creation and R20-billion for allowances and tax breaks over three years, mainly in the manufacturing sector, President Jacob Zuma said in his state of the nation speech in parliament.

In a generally upbeat speech in which he claimed that progress had been made in most of the government's priority areas, he included the announcement of R800-million in immediate relief to communities hit by the recent flooding and promised further spending on reconstruction.

Confirming that local government elections would be held before the end of May, Zuma conceded that some municipalities and public services were not performing well.


"We have to make people's experience of local government a pleasant one [because] it touches their homes and their lives directly every day," he said.

He dodged specific pronouncements on the major debates of the day, including the nationalisation of the mines and what would constitute "decent work".

He announced no new spending or initiatives on fighting crime.

Zuma arrived at parliament at the end of a sweltering day, escorted by bandsmen in scarlet, and paused for a 21-gun salute and an air force fly-past.

Watched from the public gallery by guests including former presidents Thabo Mbeki and FW de Klerk, former speaker of parliament Frene Ginwala, ANC Youth League leader Julius Malema, cricketer Makhaya Ntini and a host of diplomats, Zuma noted the absence of former president Nelson Mandela and appealed to the public to leave him in peace.

Declaring 2011 "the year of job creation", he said R9-billion would be made available for job creation over three years and R20-billion for allowances and tax breaks as a job-creating stimulus to the manufacturing sector.

He reiterated that the state-owned Industrial Development Corporation had set aside a further R10-billion for investment in businesses with high job-creation potential, taking the budget dedicated to job creation to R39-billion over the next three to five years.

Zuma said experts estimated that South Africa would be able to continue mining for at least a century - but his comments on the state's role in mining were ambiguous.

"The government has endorsed the African Exploration, Mining and Finance Corporation as the state-owned mining company that will undertake the mining of minerals of strategic significance.

"One of the government's priorities this year is also to finalise and adopt the beneficiation strategy as the official policy of the government so that we can start reaping the full benefits of our commodities," he said.

Some of those in the public gallery interpreted the comment as a warning to Malema that there would be no further state role in mining. Others saw it as a claim to an exclusive mandate for the state to mine "minerals of strategic significance".

Ministers are expected to spell out the details of some of his comments in briefings next week.

Zuma did not renew the pledge he made in last year's state of the nation speech to implement a youth wage subsidy to encourage the employment of first-time workers. Unions castigated the plan but the R9-billion jobs fund could be used to finance it.

He said a discussion paper on the national health insurance scheme proposed last year, and a government "position paper" on social security reform, were imminent.

"[Social security] issues to be dealt with include the funding and nature of the National Social Security Fund, how the private sector occupational and retirement funds will fit into the entire system, and the possible regulatory structure," he said.

Zuma acknowledged Mbeki - who has not been to parliament since he was fired in 2008 - in his opening remarks, but gave him no credit when he congratulated President Omar al-Bashir, of Sudan (who is wanted by the International Criminal Court for human rights crimes) the AU and the UN for guiding Sudan to a successful referendum on the secession of the south.

Zuma ended with an appeal to all South Africans to think about how they could help in overcoming unemployment.

"Our goal is clear. We want to have a country where millions more [people] have decent employment opportunities, which has a modern infrastructure and a vibrant economy and where the quality of life is high," he said.

Source: TimesLive