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Government pulls green paper on mandatory social security

No reasons given, but almost universal condemnation from labour to business appears to have sunk this ship before it could sail.
Minister for Social Development, Lindiwe Zulu. Image: GCIS

Social development minister Lindiwe Zulu withdrew the controversial green paper on comprehensive social security and retirement reform on Monday, without providing reasons.

The green paper was roundly condemned by business, labour and opposition parties, while National Treasury insisted it was not government policy. There is also concern that the proposed mandatory social security system would upend the private savings sector, which provides coverage to more than 60% of SA’s workforce – all of it voluntary.

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Read: Mandatory social security plan proposes another tax on the middle class

Furious pushback on mandatory social security plan

The green paper proposes setting up a new National Social Security Fund (NSSF) into which employers and employees will have to pay up to 12% of their earnings, with a ceiling of R276  000 per year or R2 760 per month.

The mandatory savings proposal was widely regarded as yet another tax on the middle class that would give more power to the ANC and allow corrupt politicians to tap into the country’s private savings.

The proposals drew fierce criticism across the board. A Dear South Africa campaign elicited more than 17 000 public comments, some 99% of them against the green paper in its entirety.

Listen to the SAfm Market Update with Moneyweb interview between Fifi Peters and John Anderson from Alexander Forbes on the issue:

Some representatives at the National Economic Development and Labour Council (Nedlac) said the green paper did not consider amendments proposed by business.

Business Unity South Africa (Busa) said the green paper’s proposals were not new, and had been the subject of discussions for several years. Any new system introduced would have to build on the existing savings mechanisms, and would have to be considered in the context of SA’s current fiscal crisis.

Economist Mike Schüssler told Moneyweb, if implemented, these proposals would “improve” SA’s ranking to seventh most-taxed country (in terms of personal income taxes) in the world.

Several commentators point out that the best social security the country can offer its citizens is a job. Social security payments from the state should only be made available when all else fails, says Dr Stephen Smith, senior policy advisor at the Association for Savings and Investment SA (Asisa).

One possible reason for Zulu’s withdrawal of the green paper is the fact that it does not appear to have been subjected to an economic impact assessment study, as required by law.

Trade union Solidarity threatened to take the minister to court unless the green paper was withdrawn, arguing that the process in introducing it was flawed, and that the content was irrational and unaffordable.

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What a pity. We now can’t comment and put the final nail in the coffin of this preposterous idea. It will gather dust and resurrect itself next election when votes are to be bought.

Who in govt comes up with these pathetic ideas?

It’s always a “collective” meaning they are all equally stupid !!

This is a great victory for the Tax Payers and Working Class, whilst it can also be considered a Tax Revolt as they refuse to entertain any new and over burdening laws.
Well Done Everyone, Kudos to you!

The less control the government has over the economy the better off our country will be for our children, So which is the next front line of this war?

EVER LOOK AT SOMEONE AND SAYS “CLUELESS?” This is her

The party is a collective. She was just the face of this next silly idea. A new idea will be pushed soon.

And God forgive me, whenever this woman appears in my TV screen I either switch off or quickly escape to another channel. What a torture of a so-called minister, what a torture!

The fact that she is a minister proves that she is the best the ANC has to offer. She is the most intelligent and capable person among the 40 million ANC supporters. Luthuli House gave it their best shot when they pushed her forward. The reality is that the rest are all guilty of corruption and had to stand back. Those who are too stupid to steal, or those who use the law to steal, survive the stand back rule. The ANC selects for incompetence and corruption and rewards it.

This was the insolvent ANC testing the water with yet another mega project over which they have complete financial control.

The alternative is that the ANC knows that the October election will be postponed and their great vote buying scheme can now be timed to coincide with that.

The is a reflection on the leader of this lot. They have no respect for him and are purposely making him look like a fool. Its their agenda.

Nobody can be this stupid.

Draws attention to the fact that the leader allows them to do things unsupervised. WTF does he think his job is? To look pretty??

This is all part of cadre education. Let the children play with bees until they get stung. Then they will stop playing with bees.

Wrong : the children of the cadres burn the beehives then wonder where the honey had gone;
I think struggle is the first word taught to the majorities kids .

Another invented scheme to loot. And honestly, where do they think we get the money? I’m sorry but there is no scheme invented by this ANC govt that will pass muster because we all just don’t trust them anymore. While we are at it they must just forget about the NHI. It won’t fly!

Dr. Joe, if I’m not mistaken, the last brainless scheme from the cANCer, was the sugar tax about 2 years’ ago? Fat lot that helped! Just look around wherever you live – how many grossly overweight majorities are walking around. And the government doesn’t give a rats’ rear end how unhealthy they’ve become as long as the sugar tax is collected from them.

Shame did orange steal hemorrhoid heads hat?

This minister epitomises arrogance.

She’s a liability, but that of course does not make her a standout in the anc government.

I’m just hoping that government will get the message. Tax payers had enough!

Thank goodness it appears sense has prevailed, hopefully not just a temporary hiatus. On a different note, far be it from me usually to comment on a person’s appearance but did the Honourable Minister deliberately go for the circus clown look for this photo or was it dress up day at Luthuli House? Surely not a look to inspire confidence, if one can make such bad sartorial choices then God help us when it comes to policy…

She has the right “clown” look for any person associated with the Africa National Circus.

Unconscious incompetence.

That is the whole of the government… don’t insult the poor lady.

Like the Terminator said “I’ll be back”. This thing will reappear in a different ANC sugar coated form.

Agreed.

They confuse defiance and stubborn stupidity with bravery.

The fact that they don’t realize it is unbelievable.

Is there a faint smell of Godongwana mixed in with this nincompoopery? Commie chommies??

Totally agree and for me it is too late. As per my blog yesterday the mere fact that this idea got to the light of day has changed my mind on how and if I employ people in the future (avoidance at all costs) because this WONT go away.

Quite agree. Employment of staff just opens you up to reams of red tape and risks for non compliance or missed returns or labour laws you didn’t manage to read up on.

Not to mention all the trappings of BEE.

There’s a reason we have the world’s highest unemployment.

And it’s the policies of the ANC

Mainstream media already reporting this afternoon that it is going to come out again (in another format). Also telling us all that we misunderstanding things and that we are confused. How can even “a toddler” be confused in this instance.

Nice slap-down of one of the Zuma RET faction in the ANC!

The green paper was a long shot, but CR had better be careful of what comrade zulu can actually get up to and that may be hard to undo.

The scheme was a stunt to draw the attention away from the highest unemployment rate in the world.

Minister Zulu looks like Fikile Mbalula in drag.

She is a deadly cocktail of Arrogance, Incompetence and Stubbornness. One sure way to screw up the country – she reminds me of Hiroshima – utter destruction.

The divisions within the ANC is clear as mud.

Treasury and RET factions have their own agendas.
JZ did not get approval from treasury when he agreed with “the fees must fall” faction. Now Ms. Zulu is trying to appease the RET faction.

Time and time again the treasury has stopped absurd actions from being implemented. Logic prevailed at the end of the day; but we see the boundaries is constantly being tested. Use your vote to stop this lunacy.

It is a pity that ANC dogma, arrogance and general ineptitude messed this up.

As the recent Zuma-riots demonstrate, some sort of social safety net is essential in SA (How many of the rioters took off work?)

The current patronage handout is not the solution, rather a Brazil-style “Bolsa Família” grant should be given. This is conditional, e.g. upon the children attending school. In South Africa any child grant should also disincentivise large families and aim to keep the desperate but unemployable at home and out of the cities.

More clueless people in government!! Are you wondering why the country is JUNK and there’s a flushing sound???

It goes to show us all that if we the people that pay the taxes pose a quick & united front against blatant stupidity and disguised greed what can be achieved. This put this future disaster to the sword and rightly so. We can do this again whenever some other patently stupid and corruptible idea rears its rear end again; this event should make us ever bolder to continue to carry on the right for our own (and our children’s) sake.

End of comments.

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