Business Unity South Africa (Busa) on Thursday welcomed recent suggestions by two Cabinet Ministers on the need for a flexible labour market.

Busa said it agreed with the suggestion by Finance Minister Pravin Gordhan and Planning Minister Trevor Manuel that South Africa would not reach employment targets unless greater efforts were made to maintain an employment friendly environment in which business was encouraged to create jobs.

It believed a flexible labour market was essential for widespread job creation in South Africa, Busa said in a statement.

"If large-scale youth unemployment in particular is to be successfully tackled, there will need to be more flexibility around the regulatory framework and the acceptance of wage subsidy initiatives," it said.

"Any legislative reform should identify and eliminate administrative or statutory obstacles to job rich economic growth."

On Wednesday, Manuel appeared to endorse Gordhan's suggestion that labour laws might need to be relaxed to create more jobs.

At a conference in Johannesburg earlier this week, Gordhan said it might be necessary "to change the way we see the labour dispensation in South Africa".

Laws might need to be relaxed to allow young people to enter the workplace and gain skills and experience at lower wages, but not at the expense of people who already had jobs.

Unless such changes were made, "we will not be able to make the breakthrough we need to create jobs", Gordhan said at the time.

In the National Assembly on Wednesday, opposition leader Athol Trollip asked Manuel whether he agreed with Gordhan's assertion that "we would have to look at restrictive labour legislation if we are to create more jobs in the economy".

Manuel replied that he had studied the text of Gordhan's speech, and this was but one snippet.

However, he then said: "I think all what he said is a position that I would endorse wholeheartedly. We must let nothing stand in the way of job creation in this country."

Busa said it remained involved in the National Economic Development and Labour Council process of examining labour law amendments to ensure that further hurdles were not placed in the way of job creation.

"The ultimate aim is to create a product of these negotiations that will create a climate conducive to job creation, especially by small business," Busa said.

According to Statistics South Africa (Stats SA), South Africa's official unemployment rate stands at 25.7%.

Under the expanded definition of unemployment – which refers to people of working age without work and available to start work that week, but who had not looked for work in the four weeks before the Stats SA interview – 7 678 000 South Africans were unemployed.

To subscribe to Engineering News's print magazine email subscriptions@creamermedia.co.za or buy now.