The National Treasury says it understands that the aim of the government’s plan to ask South Africans to contribute up to 12 percent of their earnings to a new fund is to improve its social security system but more inclusive consultations are needed.
The Social Development Department gazetted its Green Paper on Comprehensive Social Security and Retirement Reform on Wednesday.
The department proposes the creation of a new National Social Security Fund (NSSF), a government-managed fund, which will provide retirement, disability benefits and unemployment benefits.
Workers could soon contribute up to 12% of their earnings into a national security fund:
National Treasury Deputy Director-General Ismail Momoniat says the proposal needs to meet certain conditions before it becomes government policy.
Momoniat says, “A lot of the proposals still need to be tested about how they can fit into the fiscal framework, how they align with the tax system. You know none of the proposals are government policy as such. It’s a paper that has been put out for public comment after the National Economic Development and Labour Council (NEDLAC) process. It’s out to get public comment.”
“Many of the proposals certainly require a lot more discussion, assessment before they can be considered to be proposals that can go to Cabinet,” says Momoniat.
Access to pension funds could be a lifeline for many:
OUTA opposed to the NSSF
The Organisation Undoing Tax Abuse (OUTA) says it is totally opposed to the gazetted Green Paper on Comprehensive Social Security and Retirement Reform.
OUTA CEO Wayne Duvenage says instead of raising these funds the government should create jobs to tackle unemployment and poverty.
He says any mandatory government-managed fund raises red flags.
Duvenage says, “Unfortunately, we have low saving rates in this country and people can not fund themselves and have to live off the State anyway. You can’t save when you don’t have money. Those are the big issues we need to tackle as a country. Get people working, get jobs created to tackle poverty and take the State out of this as opposed to what they are trying to do with this paper.”