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Sat Jul 30 22:46:38 CAT 2016

New tax law: Dare ANC defy Cosatu and worker power?

The Times Editorial | 14 January, 2016 00:10

The decision by President Jacob Zuma to sign the new tax legislation into law will test the relations between the ANC and its tripartite-alliance partner labour federation Cosatu.

Cosatu is opposed to the new regulations and yesterday accused Zuma's administration of "autocracy" and of "poisoning" the alliance.

The new tax laws are intended to force workers to preserve their retirement savings.

It remains to be seen whether Zuma will stand his ground or wither in the face of Cosatu's hostility.

His decision will also test his leadership - will he stake it on the continued support of Cosatu or on building a prosperous future for workers?

In the past South Africa has found itself in a policy wilderness, the ANC-led government rendered all but paralysed by the fear of losing the support of its alliance partners.

It is right that the ANC tries to find consensus and consults key stakeholders but its over-reliance on Cosatu has at times hurt the broader public.

The tax and pension fund industry yesterday welcomed Zuma's decision and said it will in the long term help workers retain the quality of life they enjoyed while employed.

But Cosatu and very many workers do not see it this way. And the local government elections are around the corner and the ANC is relying on Cosatu-affiliated workers to campaign on its behalf.

The ANC needs to appreciate that it, and not its alliance partners, has been given the mandate to govern this country.

Cosatu should accept that it is not governing the country and will inevitably lose some policy battles within the alliance.

Pension benefits and access to them have always been contested, with the government arguing that the system was being abused to finance short-term luxury spending, thus forcing the state to support poor workers when they retire.

The new tax regulations are intended to protect workers from themselves.

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