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BL Premium reports that a senior Treasury official advised on Thursday that the green paper on social security reform published by social development minister Lindiwe Zulu on Wednesday had not been approved by the cabinet and was not government policy.
The publication of the green paper took the various constituencies in the National Economic and Labour Council (Nedlac) by surprise. Treasury’s Ismail Momoniat said the proposals in the green paper reflected the aspirations of some of the constituencies in Nedlac, but consensus had not been reached on them after several years of discussion. He also said the proposals had not been tested against fiscal and tax policies. The paper suggested wide-ranging changes to the social security system, including setting up a fund run by the government in which employees would be compelled to contribute between 8% and 12% of qualifying earnings up to a ceiling of R276,000. Noting that the current system excludes millions of workers from private sector pension coverage, the Department of Social Development envisages a single fund, which would pool resources to provide retirement, survivor, disability and unemployment benefits. It may be several years before the proposals in the green paper, which was released for public consultation, are implemented, if at all. The retirement and savings industry warned the government that any new social security reform programme should not disrupt the existing plans that were crucial to its own funding and the country’s infrastructure needs. Matthew Parks, who represents Cosatu at Nedlac, said any proposal to tax workers was a “no go”. The Public Servants Association said the plan was “another attempt by government to get its hands on overtaxed workers’ hard-earned money”.
- Read the full original of the report in the above regard by Linda Ensor at BusinessLive (paywall access only)
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