Unions shoot down 'ludicrous' government social security fund plan

Major workers' unions are vehemently opposed to a proposal that workers pay up to 12% of their earnings towards a government-run national social security fund.  

The fund proposal is outlined in a green paper published by social development minister Lindiwe Zulu on Wednesday.     

The paper contains views by different constituencies represented in the National Economic and Labour Council (Nedlac). 

It sets out that contributions will be between 8% and 12% of earnings, up to the current Unemployment Insurance Fund (UIF) ceiling of R276,000 a year.

Unions have slammed the proposal which would come in the form of an additional tax on workers struggling to make ends meet, citing the impact of the Covid-19 pandemic. 

This despite Zulu conceding that in the proposed fund, the government would subsidise  the contributions of low-income workers.

Some unions including Cosatu and the Public Servants Association (PSA) said they would explore legal options on the matter.

Matthew Parks of Cosatu said though the federation had yet to study the paper extensively, increases in taxes were a “no go”. He said they had long pushed for such a fund but not in the form of additional tax from workers. 

“Our position is that we support comprehensive social security and we have campaigned for it. We note and are encouraged that there have been efforts to kickstart the process and a draft document has already been put together,” said Parks.

“We will oppose and discard that which does not have the workers' support and offer our own ideas and proposals, including on the issue of funding.

“Our experience on policy matters is that you do not throw out the baby with the bath water.”

Despite shooting down the taxes, the federation said it was of the view that the paper contained some good, workable proposals which it would endorse.  

“But also, there is a chance that there are some horrible, unworkable ideas that will not get the support of the workers.

“Our job going forward will be to constructively engage with the green paper, separate wheat from the chaff and consult with workers on what they find acceptable or not,” said Parks. 

Federation of Unions of SA (Fedusa) president Godfrey Selematsela shared similar sentiments.

“It cannot be correct that government, when they create a fund that is intended to uplift our people, should actually go that far of actually taking monies from workers that are really struggling at this point in time,” said Selematsela.  

“You would understand that the pandemic has taken a huge toll on the workers and working class in general, therefore it has become difficult for the workers to survive. So as a federation we are engaging among ourselves to the extent that when we have concluded our discussion, we will issue a detailed statement.”

The PSA viewed the plan as an attempt by the government to get its hands on over-taxed workers’ hard-earned money.  

Spokesperson Reuben Maleka said they would explore legal options to halt the plan — citing corruption by government officials.  

“Given the ongoing corruption and embezzlement of money in SA, the PSA will leave no stone unturned to stop this ludicrous plan of government to establish another entity that politicians will loot without shame.  

“The PSA further holds the view that the matter related to retirement reforms are the responsibility of National Treasury and is not part of the mandate of the department of social development, of which the focus should be on social grants. The PSA will utilise legal processes to [change] this plan to the benefit of its members.”  

The paper has not been adopted as an official government position.     

BusinessLIVE reported that the paper, which was released for public consultation, did not go to the cabinet first, the usual practice. It may be several years before its proposals are implemented, if at all.

Public comments on the green paper are invited until December 10.

TimesLIVE